The Centre’s focus on improving infrastructure has led to a notable growth in demand for construction equipment and other infrastructure building machines surpassing pre-Covid level demand thereby forcing companies to dial up investments and add more product lines.
Companies engaged in production and supply of machines such as excavators, backhoe loaders, compactors, pilling and mining machinery have seen a robust jump in demand over the last three months, especially after the Union Budget, say officials.
The construction equipment segment and the commercial vehicle (CV) industry are considered to be the barometer of economic activity in a country. Sales of medium and heavy trucks and buses during FY22 for India’s two biggest CV players — Tata Motors and Ashok Leyland — grew by 51 per cent and 41 per cent respectively. Though it is on a low base the level of machine utilisation in the past few months has shot up considerably.
Back to normal
Deepak Shetty, CEO and Managing Director, JCB India, said, “After a challenging two years due to the pandemic, we are seeing business coming back to pre-Covid levels backed by a revival of the business sentiments. Announcements like the Gati Shakti and the institutionalising of NABFID are positive developments. Despite the disruptions, last year was the third best year ever for us.”
Kamal Bali, President and Managing Director, Volvo Group, India said, “In the January-March quarter we saw a sharp uptick in road construction activity, especially from February onwards. Mining industry applications peaked with an increase of over 40 per cent in the last fiscal but supply chain constraints restricted our deliveries.”
Volvo’s construction equipment range saw its FY22 volumes hit pre-pandemic levels with a growth of 20 per cent, however, Bali did not share absolute sales numbers for the year.
Volvo plans to add additional models for manufacturing in India at its Bangalore facilities in FY23. “As is normally done, our investments may include new tooling and balancing machinery in the factory for augmenting capacity for the newer models,” Bali added.
Demand has been strong for China-headquartered heavy equipment manufacturer Sany Heavy Industries. While FY22 volumes jumped to nearly 5,000 units, a growth of 43 per cent making it the company’s best-ever year in India, it is now planning on doubling its production capacity in India to meet future demand.
Deepak Garg, Managing Director, Sany Heavy Industries India said, “Our annual production capacity is close to 8,000 and currently we are producing close to 6,000 units a year. One year down the line we might have to add further capacity taking it to 16,000 units. We are optimistic of FY23 keeping in mind the investments that the government spoke about.”
April 03, 2022