Earthmoving & Construction Equipment Industry in India

Posted By Team MCG On

 

Earthmoving & construction equipment (ECE) industry is a direct beneficiary of the accelerated pace of infrastructure development in India. With urbanization, the city skylines are changing to accommodate vertical growth including high rise residential complexes, commercial spaces and multiplexes. Apart from infrastructure and building construction, India is witnessing rapid expansion of the mining sector backed by sizeable reserves of coal, iron ore and other minerals. Going forward, mineral exploration is expected to be a key agenda for the Government which would automatically trigger demand for higher capacity excavators, heavy haulage trucks and crushing equipment. The ECE sector in India is witnessing intense competition and localization has emerged as a key parameter with focus on customized products adapted to the indigenous market.

The ECE sector in India is largely organized. Many players offer a range of services including design & engineering, manufacturing, erection, commissioning and servicing. Large players have a strong supply chain to strengthen their reach and after sales network.

Earth Moving Table 1

The market for earthmoving and construction equipment stood at around 56,000 units in 2013.Overall ECE market was valued at INR 310 billion in 2013, exhibiting a growth rate of around 20% since 2010.Roads and urban infrastructure remain key end-user segments wise accounting for around 55% of the market; other key end user applications include mining, irrigation, railways, power.

Earthmoving equipment account for around 75% of the total market led by the loader segment. Sale of excavators stood at around 10,800 units in 2013, of which crawler excavator accounted for around 95% and is expected to witness high growth in the coming year.

Rental market for earthmoving and construction equipment is a high potential category and is expected to gain ground in the coming years. Huge capital investment and need for skilled technicians coupled with outdated rules and regulation that differ between states are some of the reasons limiting the growth rental equipment business. Backhoe loaders and excavators are among the most hired earthmoving equipment

Imports of key ECE machinery registered a decline from INR billion 90.7 in 2011-12 to around INR billion 50 in 2013-14. Over the recent years, multinational as well as leading domestic ECE players have established manufacturing facilities in India and domestic production of machinery has increased significantly thus impacting imports.

Prominent Multinational players include Hyundai Construction, Liu Gong India, Kobelco, Caterpillar, JCB, Volvo, CASE Construction. Established domestic companies in the ECE sector include TATA, Hitachi and Escorts Limited.

Earth Moving Table 2