With the implementation of BSIV, would be a significant step that is going to see the country’s emission norms leapfrogging to just 1 cycle behind the developed countries norms, says Sandeep Singh, Managing Director, Tata Hitachi.
With a series of smart cities, highways and connectors and clean India project in the pipeline, there expected an incremental growth in the road and construction equipment sector. How do you see the Indian equipment industry faring in these changing times?
Clearly the activity in highways and clean India have supported the growth in the road & construction equipment sector over the last several years. The growth has been over 20% CAGR over the last 4 years.This being an election year, the demand was muted given the disruption the elections normally bring to construction activity on the ground.We are also yet to see any significant impact of the smart cities on demand of construction equipment despite it being implemented some 3 years back.
The focus of this government is on Water & we expect many projects that are being planned to lead the demand for construction equipment.The industry has been meeting the demands of the various end use sectors as well as customers over a period – bringing in new technologies like more fuel-efficient engine, telematics, various improvements for operator comfort etc.
What are the three significant challenges in this sector? The ways one can adapt to handle those barriers?
The immediate challenge is the BSIV implementation for wheeled equipment effective from 1st Oct 2020. The industry is gearing up to meet this deadline with upgraded products.This is a very significant step that is going to see the country’s emission norms leapfrogging to just 1 cycle behind the developed countries norms. Naturally this brings its challenges with our customers who must adapt to the new norms & ways of working. But we believe, with customers using the current range of tippers – which have SCR emission control technology – it will be easier to train them to adapt to BSIV norms.Of course, the continuously changing regulatory regime is another challenge to adapt on tight time frames. We, through Icema, are continuously engaging with the government so that there is a reasonable time frame for the industry to comply with the change.The other challenge is of trained manpower to operate these machines. Tata Hitachi, along with other members of the industry, have invested in operator training schools, where the correct & efficient way of using machines to capacity and productively is being taught along with upgrading the skill levels of operators.
The budget had allocated Rs 1 L crore for infrastructure development. Equal importance has been given to rural road up-gradation. Your comment on the demand surge?
We observe that significant allocations have been made for Water, PMKSY, Urban development, Rural roads, railways & highway construction. Yes, this is a positive development. Having said that, the amount allotted to rural roads is lower than allocations of the last several years. However, this is still going to support the continued base demand for construction equipment.
How have the Foreign policies of import affected the equipment sector and trade of machinery and parts in our country?
As an industry, we have taken significant measures to cater to the demand of Indian customers that have been evolving over the years. Therefore, the CE industry has made large investments in not only in manufacturing but also indigenising the components to reduce imports and support the “Make in India” initiative of the government.Given the competitive market place, this industry has also achieved a high level of efficiency in manufacturing to make machines affordable to our customers. And the current foreign policies have supported the investments over time. However, any abrupt departure with reduction of import duties in the categories of CE equipment could affect the industry, as there are still large capacities available with our neighbouring countries that may lead to dumping, hurting the investments made now and in the future, detrimental to the “Make in India” initiative of the government.Care also must be taken to restrict imports of second hand equipment – especially in certain segments – as there is an issue regarding after sales support for them- exposing the risk to our financing industry, as well as noncompliance with our emission & safety norms.