Construction equipment sales set to double digits
The industry estimates that sales of construction equipment (domestic sales and exports) will increase by 15-20% in FY 2023, compared to an 8% decline in the previous fiscal year. While exports in FY22 rose 60.5% to 7,802 units, domestic sales fell 11.4% to 77,583 units.
“In the last financial year, industrial production has declined by about 8% due to declining demand for road construction and soil-powered equipment,” said Deepak Shetty, managing director of market-leading JCB India, adding that the government has focused on investing in infrastructure. Increasing economic activity will, in turn, help increase their demand. But the sharp rise in input costs and constraints on the supply chain are worrisome, he said.
The central government has budgeted a record Rs 7.5 lakh crore this fiscal year by increasing its capital expenditure by 36%, with a special focus on growth in infrastructure development. It has expanded the perimeter of the national infrastructure pipeline to include 9,335 projects (from 6,835 projects at launch), with a total investment of Rs 108 lakh crore planned between FY20 and FY25, Finance Minister Pankaj Chowdhury told the Lok Sabha in March.
Among others, plans to supply piped drinking water to rural homes, create smart cities, launch new metro rail development projects and build new airports in Navi Mumbai (Maharashtra) and Jawaharlal Nehru (Uttar Pradesh) will trigger an increase in construction equipment. Art, Shetty said.
The Prime Minister’s Speed Energy National Master Plan is a path-breaking initiative that will bring an overall focus on infrastructure development, he added.
He predicted that India would become the second largest market for construction equipment by the end of this decade. India is currently the third largest industry in the world after the United States and China.
Shetty is also the Chairman of CII EXCON, a construction equipment and construction technology trade fair to be held in Bangalore from 17-21 May. About 800 exhibitors from 46 countries will showcase their products and technologies. Organizers expect 50,000 business visitors to attend the five-day event.
In the face of global regulatory pressures to reduce carbon emissions, manufacturers are increasingly focusing on evaluating and developing products powered by green fuels such as CNG, biofuels and hydrogen. In India, work is also underway to deepen the level of localization to increase the capacity and productivity of indigenous peoples.
“Some products like backhoe loaders contain 90% localization content. Most others have a localization rate of about 50-60%. MSMEs are working to strengthen the ecosystem and enhance their capacity to move the value chain forward, ”said Sethi.
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