Construction Equipment Sales Grow 5% in Q1 FY24-25 Amid Seasonal Slowdown
Sales of construction equipment (CE) in the first quarter of FY 2024-25 increased by 5% year-on-year, reaching 28,902 units, compared to 27,577 units in Q1 FY 2023-24. Growth was driven by a 5% rise in Earthmoving Equipment sales, a 9% increase in Road Construction Equipment, and an 11% jump in Concrete Equipment. However, Material Handling Equipment and Material Processing Equipment saw declines of 3% and 4%, respectively.
Despite the year-on-year growth, quarter-on-quarter sales dropped by 29%, from 40,965 units in Q4 FY 2023-24. Earthmoving Equipment, which constitutes 70% of total CE sales, fell by 31%, with other segments also registering declines.
“The first quarter of the financial year is traditionally slower due to the normal seasonality that the industry experiences every year,” said Mr. V. Vivekanand, President, ICEMA and Managing Director, Caterpillar India Pvt. Ltd. “Additionally, this year, the General Elections in the country further slowed down the pace of projects in the first quarter due to the Election Code of Conduct being in force. However, with the continued focus on infrastructure spending, the industry is hopeful that demand momentum will resume after the monsoon,” he added.
Of the total 28,902 units of Construction Equipment sold in Q1 FY25, 26,020 units were sold in the domestic market, while 2,882 units were exported. The Earthmoving Equipment segment sold 19,858 units, while sales of Material Handling Equipment stood at 3,760 units, Concrete Equipment at 3,199 units, Road Construction Equipment at 1,457 units, and Material Processing Equipment at 628 units for the first quarter of FY 2024-25.
“Since the Indian CE industry has been on a record-breaking growth trajectory over the past two years, the slowdown in demand for construction equipment during Q1 of FY 2024-25 is less pronounced than what is usually experienced in an election year,” said Mr. Jaideep Shekhar, Convener, ICEMA Industry Analysis and Insights Panel, and VP & Managing Director, APAC & EMEAR, Terex India Private Limited. “In fact, sales in the first quarter of this year are 5% higher than those in the first quarter of last year, despite the impact of the General Elections,” he added.
On a month-on-month basis, sales in June 2024, at 9,363 units, recorded a 2% decline compared to May 2024, but there was a 5% increase over the 8,889 units sold in June 2023. While two of the five key equipment segments – Earthmoving Equipment and Concrete Equipment – registered 9% and 13% growth, respectively, in monthly sales for June 2024, the other segments, namely, Material Handling Equipment, Road Construction Equipment, and Material Processing Equipment, saw reduced sales of 7%, 15%, and 5%, respectively, compared to June 2023.
“Overall, the industry is optimistic about this year’s growth, as the CE industry in India has entered a phase of accelerated growth driven by the adoption of new technologies in response to emerging demand, increased localization of components, and policies aimed at attracting greater foreign investment,” said Mr. V. Vivekanand.
