The London headquartered Off-Highway Research, with offices around the world, is a management consultancy specialising in the research and analysis of international construction, earthmoving, mining, industrial and agricultural equipment markets. Based in New Delhi, Samir Bansal, General Manager, Off-Highway Research, offered Construction Business Today an understanding of the equipment market conditions….
How do you see the conditions obtaining in the Indian construction and equipment market in terms of a pickup in business for the various players through 2022-2023? Could you share with us Off-Highway Research’s most recent assessment of the demand and supply situation in India in respect of various equipment categories and the observable trends?
Sales grew by an impressive 35 per cent to peak at 98,286 units in 2018 but fell 15 per cent to 83,470 units in 2019. Demand declined a further 12 per cent to 73,593 units in 2020, a much less severe fall than the industry’s expectation at the start of the pandemic. The market mitigated the impact of the Covid-19 well and despite a severe second wave of the pandemic, registered a 12 per cent growth with sales of 82,218 units in 2021. Among large volume equipment, crawler excavators grew 33 per cent in 2021, mobile cranes 34 per cent and wheeled loaders 31 per cent. Mini excavators witnessed an impressive rise of 50 per cent, while rigid dump trucks registered very strong growth of 70 per cent in 2021. The telehandler market also expanded by 30 per cent, motor graders sales increased by 5 per cent and skid-steer loaders by 4 per cent in 2021. However, demand for backhoe loaders declined 2 per cent in 2021, compaction equipment fell 4 per cent and asphalt finishers market shrank 1 per cent. Meanwhile crawler dozers registered a highest drop among all with its sales dipping 17 per cent in 2021.
Could you name the specific construction and infrastructure projects which will drive equipment volumes across India and South Asia?
The Indian construction equipment market will primarily be driven by construction, mining and other infrastructural development activities, which will be supported by the macro-economic situation, policy and reforms, and availability of funds. The general atmosphere for the infrastructural development in the country is conducive for growth in construction and mining activity. The highly ambitious National Infrastructure Pipeline (NIP) with an investment of Rs 111 trillion during 2019-2024, will change the landscape of infrastructure development in the country if it is implemented with the same zeal in the way it has been planned. Energy (24 per cent), roads (18 per cent), urban development (17 per cent) and railways (12 per cent) will together account for over 70 per cent of the projected capital expenditure for NIP.
What is your outlook for the Indian Construction Equipment sector going forward?
Based on all the foreseeable factors at the moment, the Indian construction equipment market is expected to follow an upward trend in the next five years. Off-Highway Research forecasts it to grow by 11 per cent to 90,950 units in 2022 and a further 8 per cent to 98,550 units in 2023. Sales of construction equipment are predicted to fall 7 per cent to 91,800 units in 2024 but will bounce back with a 9 per cent growth to 100,100 units in 2025 and a further 6 per cent to peak at 106,200 units in 2026. Almost all types of equipment will witness growth, though the market will continue to be dominated by the five most popular products: backhoe loaders, crawler excavators, mobile cranes, compaction equipment and wheeled loaders. Backhoe loaders will continue to remain the largest selling type of equipment, but crawler excavators would grow at a faster pace. In addition, the market for mini excavators and skid-steer loaders will expand significantly from current levels.