Deconstructing construction equipment rental in India
There have been rapid changes in the CE industry, particularly over the past decade. With a multitude of factors at play, the Indian CE industry is poised to become the second largest in the world and OEMs are gearing up for a major growth phase. The long-term mega-scale national infrastructure projects set in motion by the Government of India, under the National Infrastructure Pipeline (NIP) and the PM Gati Shakti National Master Plan means that the demand for construction equipment will only grow stronger.
With this context set for the domestic market, there is tremendous scope for both OEMs and the rental companies to gain; as the pie is only getting larger. Hence, capacity enhancement will have to be a priority area for both players – primarily in the two major CE segments, i.e. the backhoe loader segment and the road building segment.
To address the point of whether rental companies are, or should be concerned about some OEMs entering the rental business, we need to first zoom out and get a sense of how the CE sales and rental business operates in India. In terms of rental penetration India compares favourably with many mature CE markets. As per market intelligence studies, it is reported that the percentage of construction machines sold via the rental channel rose a whopping 20
% in the 10-year period from 47
% in 2010 to 67
% in 2020-21. So effectively, the share of rental sales now stands close to 70
% of the total construction equipment sold in the country. However despite this growth spike, construction equipment rental in India is still a fragmented market with highly localised activity.
OEMs such as Mahindra Construction Equipment (MCE) are introducing newer, innovative technologies to offer technically advanced, more efficient machines at a lower cost to our rental customers. This eventually contributes in the overall expansion of the construction equipment rental market.
There are several advantages for our customers when they choose to rent construction machines from an OEM like MCE:
- Innovative Equipment solutions: Advanced Mahindra iMAXX Telematics technology comes inbuilt in the latest models of Mahindra EarthMaster and RoadMaster.
- Extensive equipment across India: Our complete range of equipment solutions is available at 60 locations pan India.
- Large variety of fleet across makes and models: Our equipment range spans backhoe loaders, wheel loaders, hydraulic excavators, motor graders, all-terrain cranes to concrete pump, mobile batching plant and more.
- Managing fleet equipment across business lines: We provide well-maintained robust machines to cover the entire infrastructure spectrum.
- High Quality Asset Management capabilities: Our trained and experienced team takes complete end-to-end responsibility of managing the equipment, from storage and parking to routine and emergency maintenance and insurance claim handling.
- In Depth knowledge and expertise in equipment rental and allied businesses: Being part of the Mahindra Group with its vast proven experience in manufacturing of agriculture equipment and utility vehicles, MCE has unmatched expertise and backing, with an ISO 9001:2015 certification.