Construction Equipment Sales in India
“India’s construction equipment (CE) market is expected to grow by 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,” states Indian Construction Equipment Manufacturers’ Association (ICEMA). The numbers are quite encouraging and call for the study of factors that would lead to such huge sales of CE in India.
Market overview of CE segment in India
To give a snapshot, the CE sector is one of the most important sectors of the economy which forms around 7-8 per cent of the GDP. Hence, the segment acts as a key driver for various infrastructure developments. Further, to create growth opportunities for various other industries in the economy, the sales of CE is bound to go up.
Reasons for increased sales in future
There are various reasons which would lead to increased CE sales in India
- Infrastructure spending is expected to grow from 7.2 per cent of GDP in 2012 to 9 per cent by 2017. This is likely to increase the sales of equipment.
- Growth in transportation sector is also expected to increase the demand and sales of CE.
- Several initiatives of the government such as 98 Smart City Project and development of urban infrastructure including metro rail projects, port development, industrial corridor and dedicated freight corridor is likely to boost the CE demand and sales.
- India will also see huge increase in mining operations in future and these mining operations will lead to a notable demand and sales.
- In future, growth in population will also definitely lead to increase in demand for residential and commercial real estate projects, thereby, providing the opportunity for CE market growth.
- Increased use of equipment in traditional applications such as digging and soil loading so as to increase the speed will also propel the growth of the segment.
- Expansions, agreements, contracts, joint ventures and partnerships in the sector will also lead to growth in sales. Alliance across the industry will help the Indian manufactures to gain a larger share not only in the domestic but global market.
- More financing of equipment will also lead to their wider use by encouraging users to opt for these machines.
In a nutshell
If experts are to be believed, then the next few years can be the right time for the CE manufacturers to launch new products and increase their sales not only in the domestic but international markets. With the increased emphasis on indigenisation, the manufacturers can fulfil the domestic requirements with tailored and cost-effective options and positively impact their sales. Thus, overall, the construction equipment sales are bound to rise.
