Construction Equipment Rental News
Construction equipment rental as a sector is set to achieve a CAGR 7 percent by 2019 as forecasted by various studies across the globe. While globally the rental market has anything between 40-65 percent penetration, the numbers are much lower in India and most of developing Asia and the middle east. Industry experts are of the opinion that the market is set for a boost after the slow down in the previous years. The Make in India campaign is expected to prove to be a steroid to the previously slumped market and set it on a growing trajectory.
Experts are of the opinion that various factors like a growing need to replace outdated machinery with the latest available tech and increasing expenditure on commercial and residential infrastructure will all contribute to growth of the construction equipment rental industry in India. The big shots in the industry have started renting out equipment to construction companies in an attempt to ride the growing wave of equipment rental sector in the industry.
Big shots in the industry opting for rental services to construction companies goes to prove that the market is a more or less even split between the OEM’s and third party rental companies. As a matter f fact construction companies are increasingly preferring to opt for equipment rentals from equipment manufacturers given the additional services that they provide. The trend of renting equipment directly from manufacturers is bound to grow in the years to come and the OEM’s will make the most of it.
The equipment rental industry in India has a very low penetration as compared to other developing nations. Most machines in use are owned and people are still getting used to the idea of renting construction equipment. One major problem that the equipment rental sector faces is the lack of servicing in the remote areas where the machines are increasingly being used. Not having the required service facilities in the remote areas is impending the growth of the equipment rental market in rural India.
Increased spending on construction of roads, highways and flyovers under the make in India campaign are bound to create an increased demand for equipment rental services across the length and breadth of India. The major boost however is the fact that various huge projects are simultaneously going on to create the increased demand and more projects are seeing approvals with the passing day. In an attempt to bring the road density in India at par with its international counterparts , the equipment rental sector is getting a much required boost.
A major factor aiding the growth of the equipment rental business is the introduction of GPS monitoring and control systems in the newer machines in addition to other new technologies that are being added to the machines. Constriction companies can not afford to block capital in depreciating assets that would remain idle once the project is completed and have them be sold for scrap given that machines are becoming outdated at a much faster rate as compared to the last few decades.
Simply put if the challenges are met head on, the construction equipment rental sector is all set for a boom in the industry that is here to stay at least for the next decade to come.