Future Of Construction Equipment Manufacturers In India
The construction equipment manufacturers in India have all the reasons to smile. Let’s take a look at what is in store for them in future…
According to the Indian Construction Equipment Manufacturers’ Association (ICEMA), India’s earthmoving and CE market is expected to grow by a healthy 20-25 per cent over the next few years to reach 330,000 to 450,000 units sold in 2020, from current levels of about 76,000 units. This would imply a US$16 billion-$21 billion market, up from today’s $3 billion.
Further, it is believed that the sector will continue to be dominated by backhoe loaders (more than 40 per cent of total demand), but broad-based growth is expected across products, with each segment expected to see double digit growth. Thus, quite obviously the future of CE manufacturers in India is very bright.
Factors Driving the Demand for Construction Equipment
There are many reasons behind the smiling faces of the construction equipment manufacturers in India.
- Demand for CE is likely to rise as a result of growth in traditional end-user industries, including construction and mining. Such an increased use of CE in previously traditional applications to speed up projects will give a rise to new demand in applications such as digging and material handling, especially in time-sensitive projects.
- Urbanization will also drive the demand for construction to meet residential, commercial, and infrastructure development needs, thus, giving a boost to the CE industry.
- New players entering the market will make competition stiffer, thereby, making CE more affordable. This will further deepen the markets to cover users with CE needs who previously had low access.
- Increased productivity and the reliability of CE ultimately translate into higher profitability from fewer defect-related claims and the avoidance of death penalties. In addition, CE significantly reduce the cost of large-scale projects. End-users are realizing the above facts and moving to heavy CE.
- Last but not the least, there are clear benefits of using CE over manual labor and traditional methods like improved quality, timeliness, better project financials and safety. This is leading to more and more demand for CE and is bringing smiles on the faces of the manufacturers.
Challenges Ahead For Construction Equipment Manufacturers
If there are many opportunities, future challenges are no less.
- While CE manufacturers will continue to put in the market increasingly sophisticated machines in greater numbers, the industry might face an increasing shortage of trained manpower to operate and service these machines. While the CE manufacturers do have skill training programs, unfortunately these would not be adequate to meet the expected demand.
- End-users are demanding world-class technology for better fuel efficiency, higher productivity and profitability, thus, CE manufacturers need to come up with innovative solutions to meet customer expectations.
- Manufacturers need to adopt inorganic growth strategies such as acquisitions to cope with the increasing demand for heavy CE in the country.
Future of Construction Equipment Manufacturers
The high construction and infrastructural growth, technological developments and their adaptations and rapid urbanization will fuel the growth of heavy CE industry in the country. It is believed that the industry will see major agreements, contracts, joint ventures, and partnerships in future. These strategies will further aid the CE manufacturers to create a large customer and partner base. Already many new CE players have emerged in the country and many more will hit the ground in the coming years. All these players will increase product variety, introduce new applications and services and hence, catalyze growth of CE by increasing supply. Thus, construction equipment manufacturers in India have all the reasons to smile.