Dimitrov Krishnan
Managing Director, Volvo CE India
What is the current market scenario of the Indian construction equipment industry?
India's construction equipment industry experienced a 26% sales increase, reaching 135,650 units in the 2023-24 fiscal year. This growth is fuelled by significant government investments in infrastructure, expanding mining activities, increased mechanization, rapid urbanization, and rising demand for residential and commercial developments due to population growth. Major initiatives like the National Infrastructure Pipeline (NIP) and National Monetization Pipeline are creating vast opportunities in sectors such as road construction and urban infrastructure.
How far does expanding infrastructure investment push the consistent use of equipment in infrastructure projects?
The growing investment in infrastructure in India, driven by rapid urbanization and proactive government initiatives, has significantly increased the demand for construction equipment. As the government prioritizes modern infrastructure development, the construction equipment market is witnessing remarkable growth. This upward trajectory is bolstered by favourable macroeconomic conditions, strong government support, and strategic investments in technology, sustainability, and manufacturing.
The sector is also adapting to modernization trends such as digitization, alternative fuels, and customization to meet local demands. Furthermore, the Union Budget for 2024-25 emphasizes infrastructure development, creating new opportunities for the deployment of green construction equipment.
How do you look at the progress of Make in India initiatives in construction equipment? What are your major initiatives?
The progress of the Make in India initiative in the construction equipment sector has been promising, with significant strides made towards enhancing local manufacturing and sustainability. Volvo CE is fully committed to this initiative, focusing on sustainability through the development of fuel-efficient machines and electric compactors like the PT220 and DD40.
With a localization level of over 70%, the EC210 crawler excavator is a testament to Volvo’s commitment to the Make in India initiative. A significant
portion of the EC210’s components are sourced from Indian suppliers, strengthening the local supply chain and contributing to economic growth. The excavator is designed with features tailored to the Indian construction sector, focusing on fuel efficiency and low maintenance costs, which are crucial for local operations.
Our robust localization strategies are aimed at increasing local content in manufacturing, which not only enhances the accessibility of advanced equipment but also bolsters the local economy by streamlining the supply chain for greater cost-effectiveness.
By localizing production, we can respond swiftly to market demands, ensuring that our equipment is tailored to meet the specific needs of Indian projects. This approach supports the growth of India’s construction and mining sectors, fostering technological advancements while aligning with broader economic goals. We prioritize continuous improvement, adapting our global standards of product design and quality to suit the unique requirements of the Indian market. Through these initiatives, we have strengthened our market presence and contributed to the nation’s economic development.
The Indian CE industry needs to focus more on enhancing exports. What is your take on this and what are the steps from the company in this regard?
Currently, around 20% of our production in India is dedicated to exports, and we aim to increase this share in the coming years. We manufacture a range of road equipment, including our compaction products and excavators, which are exported not only to neighbouring countries like Nepal, Bhutan, Bangladesh, and Sri Lanka but also to Southeast Asia, Africa, the Middle East, and Latin America. This aligns with our broader strategy of leveraging India as a global manufacturing hub, which is in line with the government’s ‘Make in India’ initiative.
To further enhance our export footprint, we are focusing on increasing the localization of components, optimizing manufacturing efficiencies, and expanding our product portfolio to meet global standards. Our facilities in India produce not only complete machines but also components that cater to international markets.
It is equally important to enhance the manufacturing of components and aggregates locally. How do you think this is important from an OEM (Original Equipment Manufacturer) perspective?
Enhancing local manufacturing of components and aggregates is crucial from an OEM perspective as it directly impacts cost competitiveness and operational efficiency. For instance, our recently launched EC210 excavator, designed and developed in India, boasts 70% local content. This not only incorporates advanced hydraulic technology to achieve a 20% reduction in fuel consumption but also significantly reduces our environmental footprint. The strong demand for this excavator underscores the benefits of local manufacturing.
Moreover, local manufacturing strengthens supply chain resilience, reducing dependency on foreign goods and mitigating risks from global disruptions, while allowing for quicker response to market demands. From a sustainability point of view, localization of raw materials contributes to a reduced carbon footprint by decreasing transportation emissions and enhanced energy efficiency in production. It also aligns with government initiatives like ‘Make in India,’ reinforcing Volvo's commitment to national growth and compliance with evolving environmental regulations.
How are exhibitions like bauma CONEXPO INDIA facilitating the progress of Indian CE industry?
Exhibitions including bauma CONEXPO INDIA are instrumental in driving the development of the Indian CE industry. Industry leaders showcase the latest innovations, technologies, and solutions designed to cater to the increasing demand of customers. Through these events, it encourages manufacturers and suppliers to cooperate with the customers and facilitate close interactions to
foster relationships and marketing knowledge. For Volvo CE, bauma CONEXPO INDIA provides the opportunity to interact with customers, showcase our advanced products, and share our contributions to sustainable infrastructure development. Additionally, these platforms enable us to stay updated on market trends and gauge the evolving needs of the Indian construction sector.
What is your vision on bauma CONEXPO INDIA as a platform of end-to-end solutions to infrastructure development?
Bauma CONEXPO INDIA has positioned itself as a platform for end-to-end solutions in the infrastructure sector, bringing together major stakeholders from the construction and infrastructure ecosystem, and offering a unique opportunity to showcase equipment, technological advancements, sustainable solutions, and innovations that address the growing infrastructure needs of India. This ultimately leads to the goals of collaboration toward building
intelligent, sustainable infrastructure, enabling efficient and environmentally friendly solutions, which also aligns with our vision.
What is your vision on India becoming the second-largest CE market globally? How are you gearing up for this? What is the way forward?
Our vision for India becoming the second-largest construction equipment (CE) market globally is grounded in our strategic initiatives and commitment to growth. We aim to significantly expand our presence in the mid-range construction equipment segment, targeting a doubling of our market share while enhancing product localization. With our EC210 excavator already gaining traction, we plan to introduce additional variants within the 20-ton excavator and compaction categories to meet diverse customer needs.
To support this ambitious growth, we will strengthen our distribution network by increasing our dealer presence across India. We anticipate the market will grow by 10-15% annually, driven by robust government infrastructure initiatives, with a goal of achieving sales volumes of 125,000 to 130,000 units in FY2024. Our commitment to technological innovation and sustainability positions us well to meet the rising demand for major infrastructure projects.
India's attractiveness as a manufacturing destination is on the rise, prompting investments in local component production that will further bolster the industry. Despite challenges such as fluctuating steel prices and competition from Chinese manufacturers, we remain focused on sustainable practices, digitalization, and expanding our electric equipment offerings. Strengthening customer relationships and enhancing after-sales support will be crucial for creating long-term value.
Having achieved a historic milestone of 107,779 units sold in FY2023, we are on a clear trajectory to become the second-largest CE market by 2030, contributing approximately 8-10% to India’s GDP. With the government committing over US$1.3 trillion to the National Infrastructure Pipeline, we are poised for transformative growth in the coming years. Our strategy includes leveraging government initiatives like Make in India and Production-Linked Incentives (PLI) to enhance local manufacturing capabilities and drive exports.
