CASE Construction Equipment - Sandeep Mathur, Brand Leader India & SAARC
BS IV engine will give better performance and mileage, and reduce PM emissions, so, it’s an important initiative of the Government.
The BS norms were instituted by the government to regulate emission of air pollutants from motor vehicles and protect the environment. BS IV engine will give better performance and mileage, and reduce PM emissions (a main constituent of outdoor air pollution) by over 80% in diesel engine vehicles.
As a responsible organisation, we have created training modules for our dealers and operators to give them an understanding on how to use the new and upgraded machines. Additionally, before the final launch of the new machines, we will conduct sessions to further educate the operators, dealers, as well as our customers about the usage and benefits of BS IV compliant machines.
Implementation of BS IV norms will pose two major challenges for sellers as well as buyers: cost intensiveness and lack of skills to adapt to the new technologies.
The cost of production will increase causing a rise in the end price of the product for consumers, making it difficult for sellers to market and sell the product. This will further impact the overall cost of the project as well as after-sales service.
Moreover, the slowdown in business and financial crisis induced by the pandemic has reduced the purchasing power of consumers across sectors, because of which, buyers are apprehensive of making big purchases.
The other major challenge will be to empower and educate the existing manpower with the required skillset to adapt to the new technologies. There is lack of knowledge, skill, and agility in adapting to new technologies at all levels, including operators who will run the machine and technicians who will be required to service the machines. This can cause a delay in the buying decision, or even create a shift in the market, increasing the demand for rentals or purchase of a second-hand equipment as opposed to purchasing a new one.
The demand for all types of machines is primarily driven by utility and requirements, more than the price; therefore, the price gap between different types of machines will not impact the demand of either.
Excavators and Backhoe Loaders are one of the most widely used construction equipment in India. Collectively, they encapsulate a major share in the overall construction equipment market in India owing to their multi-tasking functionality.
As per recent industry reports, the Indian crawler excavator market is expected to grow at a CAGR of 5.41% during the period 2018-2027. Factors such as favourable government policies and FDI, as well as focus on indigenous production have contributed to this growth.
Demand of backhoe loaders in India has also witnessed a sharp rise in the last few years; it accounts for nearly 65% of the Construction Equipment segment in India. The fact that the backhoe loader can be used for multiple activities and can easily travel on roads, makes it a viable choice for many users.
Both the products have their own USPs and are used in various construction activities. However, the demand for all types of machines is primarily driven by utility and requirements, more than the price.
Owing to the price-conscious behaviour of consumers, there might be an increase in rentals and sale of second-hand equipment, primarily because purchasing a new machine will involve a comparatively higher one-time cost. Industry reports also suggest that the Indian construction equipment rental market is anticipated to register a CAGR of about 5.1% during the forecast period (2020 – 2025). So, growth in rentals in the near future can be expected.
NBM&CW August 2021
