Reports from Off-Highway Research gave overview of global sales of construction equipments, which had been growing since 2003 and crossed 1,000,000 units in 2007 but went down drastically in 2008, and reduced to 600,000 units in 2009, but by 2011 sales returned to 830,000 units.
In value terms, in 2007 global sales exceeded $ 100 Billion compared to around $83 Billion in 2011. The developed market of Europe and US are still suffering badly and are still running 50% below their peak levels. Although these markets are growing slowly, these are traditionally strong markets which constituted 50% of demand in 2007.
As a result all manufactures are dependent on BRICs, where the focus is on infrastructure development. China and India will be key market for all of them for many decades to come.
In India the construction equipment growth is set for long term robust growth as per research. In unit terms market is forecasted to grow from 55,000 units in 2010 to 100,000 units in 2015 with CAGR of 13%. In value terms, the market is expected to grow from US$ 3.9Bln to US$ 6.9Bln.
A look at some of the sales stats:
A large number of international construction companies are focusing attention to enter in India. These are being done either through subsidiary companies or Joint venture with local partners.
The structure of Indian market is changing with Indian players with global exposure are aware of latest trend and buying is increasingly moving from “based only on price” to “value for money”. Expectation is of excellent after-sales service irrespective of initial purchase price and evaluating competitive offer based on technology, productivity, reliability, maintenance cost, support packages and delivery time offered. Competition is getting very intense and market forces will result in finding own level of the price to quality ratio.
In India, the sale of backhoe loader have been continuously growing since 2000 and is expected to exceed 35,000 units in 2012 and will remain most popular equipment among plat hirers and small contractors but is expected to be replaced by efficient and productive machines like crawler excavators or wheeled loaders.
Summing up, all global manufactures and their component supply chains are unanimous in their belief that India market gives tremendous opportunity to grow exponentially over the long term.
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Founder & Managing Director at Expand in India, and IIM Lucknow Alumni having close to 20 years experience in business management, industrial management, strategic planning, marketing, operations, team building, leadership , consulting and six sigma process orientation.
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