Market Of Earth Moving Equipment In India
Increasing demand for construction and infrastructure activities is anticipated to augment earth moving equipment market growth in India over the next few years. We look at this market and the opportunities for growth in future…
Earth moving equipment market in India has been witnessing strong growth over the last few years on account of increasing demand from the construction sector across the country. The demand is also growing owing to increasing government spending on infrastructure development including residential and non- residential projects. Further, increasing mining activities are also driving the market for earth moving equipment. This continuous growth in infrastructure, mining and construction projects is anticipated to enhance the application scope of earth moving equipment.
Thus, the construction and earth moving equipment market in India is expected to grow at a healthy CAGR of 20 to 25 per cent over the next few years, from FY13-14 levels of 48,000 units. This is supposed to bring the market to $21 billion by 2020, up from today’s $3 billion. Among all the industries, the key demand drivers going forward are likely to be road construction, urban infrastructure, irrigation, real estate, construction and mining.
Earth Moving Equipment At A Glance
Earth moving equipment mainly comprises excavators (compact excavator, dredging, dragline excavator, front shovel and others), loaders (skip loader and wheel loader), backhoe loaders, construction tractors and others (grader, scraper, track loader and material handler etc). Among all earth moving equipment, backhoe loaders are flourishing well in India and have a very bright future in the country. At present, it comprises 65 per cent of heavy earth moving equipment segment.
The backhoe loader, consisting of a tractor, front shovel/bucket and small backhoe in the rear, is a versatile piece of equipment and is therefore, often the only piece of heavy equipment brought onto small to medium landscaping projects. A backhoe can duplicate the work of a bulldozer, front end loader and excavator. The backhoe loader also has the advantage of being driven directly to the different job areas as opposed to other specialised machines which need to be towed into the site and require external power sources. Thus, backhoe loaders are quiet popular in India and the country is the second largest market for backhoe loaders in the world. Followed by backhoe loaders are the excavators which are also very popular in the earth moving equipment segment.
Issues To Be Addressed
Overall, the Indian earth moving equipment industry is poised for excellent growth in the coming years, based on India’s overall manufacturing sector and infrastructure growth. To leverage this opportunity, Indian construction equipment manufacturers need to focus on developing individual and pooled capabilities to develop global competitiveness across the sector. Collaborative endeavours to provide integrated services, industry bodies to promote the industry’s interests and working with the government to promote technology development are some of the key measures that should be taken in the future.
Bright Future Of Earth Moving Equipment
In a nutshell, increasing demand for construction and infrastructure activities is anticipated to augment earth moving equipment market growth over the next few years. Increasing government spending on infrastructure development including roads, metro rails, flyovers and commercial complexes will further help to surge the market growth over the next few years.
As a result, the heavy earth moving and material handling equipment segment is projected to grow at the CAGR of 8.42 per cent from 2015 to 2020. It is believed that the key players in the segment will have to implement different strategies such as expansions, agreements, contracts, joint ventures and partnerships to garner a larger share in the market.