The excavator market has been driven by the government's focus on infrastructure investment

- BKR PRASAD

Head - Marketing & Product Development, Tata Hitachi Construction Machinery Company

How do you view the demand trend of hydraulic excavators in Indian infrastructure development activities?

The excavator market in India has been consistently growing ever since the elections in FY 2019-20 despite the pandemic. It grew by 7% each in FY 2020-21 and FY 2021-22. This growth has been driven by the government's focus on infrastructure investment as a primary way to grow the economy.

Within the excavator segment, the 20T constitutes nearly 60% of the market and is widely used in all big construction and infrastructure projects like highway construction, stone quarrying, real estate, railways, irrigation, etc. A major part of this segment is driven by demand from first-time buyers, small hirers who tend to prefer value for money, and durable machines with low costs of operation. Premium machines that come with additional features are preferred by large contractors, fleet owners, and some construction companies who focus on productivity and utilize telematics to monitor the performance of the machines for increased efficiency in operations.

The other segments are the 10T and the 7T class excavators. These machines are deployed for smaller works like PMGSY, brick kilns, road construction, real estate minor irrigation works, and small stone quarries.

The mini excavators comprise <7T class and are one of the fastest growing segments with a wide range of applications ranging from real estate, industrial utility, agriculture, plantations, and a variety of maintenance works. Modernization of solid waste management under the Swachh Bharat mission has increasingly led to the procurement of these machines by local bodies and panchayats. Drinking water pipeline laying in villages under Jal Jeevan Mission has been a big driver of growth in this segment.

The larger >45T class excavators are predominantly used in mining and the segment has also been consistently growing, driven by the increased focus on coal, cement, and iron ore production for the growing economy.

What is your take on the revival in the market for excavators?

The growth in the excavator market has been driven by the government's focus on infrastructure investment as a primary way to grow the economy. In line with this, the budgetary capex has seen an upward trajectory with this year's Capex up by 35% which is around 7.5 lakh crores.

Some of the key sectors that have a big impact on excavator demand are as follows:

• Roads and highways allocated Rs 2 lakh crores with a national highway construction target of 12,000 km which is a 15% increase in comparison to 2021-22
• Water resources - driven by Jal Jeevan Mission - increased from Rs 45,000 crores to Rs 60,000 crores
• PMGSY from Rs 14,000 crores-19,000 crores
• Swachh Bharat Mission from Rs 8,000 crores to approximately Rs 9,500 crores
• Railways (including borrowings) from Rs 2.15 lakh crores to Rs 2.46 lakh crores
• There are also increases in PMAY, Metro Rail, AMRUT (Urban Infra Development), and Smart Cities.
• Capex of 21 states shows a growth of around 14% with outlays in roads, irrigation, urban development, etc.

How is technology evolving in excavators in terms of productivity, fuel efficiency, and operational efficiency?

There is an increasing need for improving the operational efficiency of excavators as the input costs keep rising. Competition for contractors keeps the pricing pressure up. In our EX Super+ series of hydraulic excavators, Tata Hitachi, through its superior hydraulics, keeps the fuel efficiency high and, at the same time, increases the machine speeds to increase productivity in terms of cost per ton of excavation. Along with superior hydraulics, the ZAXIS series of excavators has a very intelligent computer controlling performance and optimizing parameters to maximize speeds and minimize fuel consumption. Through this, we, at Tata Hitachi, are keeping the performance of our products high.

How is the trend evolving in hybrid and electric concepts?

With the target of Net Zero emissions by 2070 taken by the Government of India, reduction in the use of fossil fuels by our machines is a major challenge as well as an opportunity before us. Electrification of our excavators is one of the possible ways in which we are trying to achieve this goal.

There are various aspects being considered, including technologies that will be more suitable for different product classes, in terms of usability, mobility, infrastructure requirement, cost impact, how much leeway the platform allows us, etc. Based on these considerations, we have identified various projects to be taken up for the electrification of the different categories of models in our portfolio. Hitachi Construction Machinery, Japan, our parent company, has electric drive technology in their mini excavator and large mining machinery.

Resolving the following issues will be key to moving towards complete electric offerings to the customers. Primarily, for moving to electric-driven machinery, there needs to be a strong business case to make the move. It could be backed by an economic standpoint or an environmental position taken by the government, or by a social cause where the viability gap can be bridged by the appropriate subsidy. Here, there could be various levels of Public-Private Partnership where we could harness the CSR spending towards this end or help create a pool to help bridge the infrastructure challenges which is our next hurdle.

The focus on the ecosystem for electrics has already been brought by the automotive segment which has shifted largely into this technology. This shift may help us partially in building the infrastructure and the know-how for the support systems. So, while there are efforts on developing the technology, commercialization is, still in our view, some distance away.

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