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After peaking the numbers in 2018, the Indian crawler excavator market plummeted to a low in 2020 due to the pandemic impact. However, the revival of infrastructure activities is expected to turnaround the excavator market in the coming years.

Being the important machine used for the earthmoving jobs, hydraulic excavators play a key role in the construction and mining activities. India being the fast-developing economies with a major focus on infrastructure development, hydraulic excavators will play a crucial role in the growth of India's infrastructure creation in the coming years.

Leading the pack

Any project starts with excavation of earth, be it the construction of new project, or mining. Thus, hydraulic excavators make itself perhaps the most important construction equipment in infrastructure development. According to Samir Bansal, General Manager, Off-Highway Research, crawler excavator is the most important equipment for infrastructure development that is required for construction as well as quarrying/mining for sand, stone and minerals. “It has the largest equipment market by value and is the second largest in terms of number of units sold after backhoe loaders,” he points out.

Market dynamics

The market for crawler excavators is dominated by domestic manufacturers, which over the years have developed a strong manufacturing base in the country coupled with a widespread distribution network. “Demand has remained consistently high and it grew steadily from 16,488 units in 2016 to peak at 25,474 units in 2018 before dropping to 16,382 units in 2020,” Bansal points out.

Deepak Shetty, CEO & MD, JCB India, says, “The recently constituted Gati Shakti programme, the focus on irrigation, power and projects in rural India are going to be the lead growth drivers for these products, including excavators. The pandemic has also highlighted the need for a robust health infrastructure across the country. Thus, going forward, this will also be one of the areas where construction equipment will play a significant role.”

Technology trends

According to Shetty, as excavators become advanced and smarter, there exists the need for a real-time interface of the machine, the user, the customer and the dealer. “JCB excavators are today connected in real-time through our advanced telematics technology called Livelink. This technology gives real-time updates on the Service, Operations and Security of the machine. It also enables in ascertaining the quantum of work that has been done through a period, in addition to Geo fencing and time fencing of equipment,” he adds.

Market challenges

The current market is challenged by the Covid pandemic, which is now recovering slowly with the infrastructure projects bouncing back and the policy support from the government. The market however, is facing some traditional challenges like lack of adequate technology adoption, skill gap among workers and operators, lack of ready availability of speciality components etc.

Sandeep Mathur, Brand Leader, CASE Construction Equipment, says,“There are certain hindrances while adapting to digital technology and automation. Besides, there are certain challenges such as scarcity of labour, lack of training machines, and so on. These difficulties may be addressed gradually because the business is booming and there is a growing need for construction equipment for new projects, particularly road infrastructure projects.”

Shetty is of the view, “The industry is currently going through a challenge in terms of the availability of semiconductors, rising commodity prices and also stress in terms of logistics. We feel that as the industry grows, these issues need to be addressed as soon as possible. Especially the area of commodity prices which includes steel is currently an area that requires support.”

V. G. Sakthikumar, Managing Director, Schwing Stetter India, adds, “There are some challenges in term of input cost since steel price went up which impacts directly on total manufacturing cost, hence product costing impacted.”

Rental push

The rental market for construction equipment is a booming sector. As one of the largest used construction equipment, hydraulic excavators have a relatively bigger share of rental market. According to Bansal,small contractors and rental companies represent the largest owner group of crawler excavators that constituted nearly 70 per cent of the market in 2020. “Apart from bidding for contracts, small contractors actively rent out their idle machines. The most popular size is 20 tonnes due to the variety of applications for which this size of machine can be used, and also its compatibility with 10 tonne tipper trucks, the most common haulage equipment in India,” he adds.

On the emerging trends in rentals, Mathur says, “Especially after the COVID-19 pandemic, there has been an increasing demand to rent equipment instead of owning one. Rentals are playing a key role in the business as it benefits the customers in various ways. The customers can now choose the latest equipment without spending too much and it also saves them from further maintenance costs, fuel expenses, storage issues, and they can also get the specific machines as per the project needs.”

Make in India

Local manufacturing has helped the crawler excavator market to excel in India. Shetty says, “JCB excavators are today helping build a new India. With their technological advancements, the machines in India are on par with anywhere else in the world and have proven themselves over the years. With the industries finest and largest product support network, our customers are never too far from professional product support. Also, with the influx of digital technology in our industry, customers can today order parts online, locate their machines with the help of the Internet and also effectively manage their equipment fleet.”

Market outlook

Infrastructure creation is one of the top priorities of the government for the growth of the country. Various schemes introduced by the government like Sagarmala, Bharatmala, National Infrastructure Pipeline (NIP) and the recent Gati Shakti are all expected to push the infrastructure growth in the country. As an important equipment in construction and mining activities, excavators will play a crucial role in the coming years in the infrastructure development of the country.

Off-Highway Research believes that sales of crawler excavators will jump to 22,000 units in 2021, an increase of 35 per cent over the previous year. “The long-term future trend still remains positive, and demand is expected to grow with a CAGR of 10 per cent during 2022-2025 and reach 32,000 units in 2025,” Bansal concludes on a positive note.

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