Construction equipment industry could grow 25% in 2021, regain pre-Covid peak in 2022: JCB India – Economic Times

The construction equipment industry could expand up to a fourth in 2021 on the back of the government’s infrastructure spends and could likely regain the past peak sales of 2018 next year, JCB India said.

Despite the initial reluctance to buy in May and June post the second wave, with the payment to the contractors in the infrastructure space being released, the traction in July has been better than expectation and the sales for equipment is likely to gain speed with festive season around the corner.

The industry registered a growth of 65% during January-June of 2021 compared to the previous year despite the second wave of Covid-19 impacting sales for a couple of months, said Deepak Shetty, Managing Director, JCB India.

“The second half of last year was very strong, but I would still estimate around 20-25% improvement (in sales) this year. The industry, and JCB, should also be seeing our peak (sales) again by 2022,” Shetty told ET.

About 63,500 units of construction equipment were sold in India in 2020, of which JCB accounted for about 35,300 units, as per data released by industry body ICEMA – Indian Construction Equipment Manufacturers Association.

There was some reluctance in the market from financiers toward financing the purchase of new construction equipment, Shetty said, which was hampering sales to an extent. But he was hopeful that by September, the industry would be on a similar growth track as that of last year.

JCB launched its new range of vehicles compliant with the BS4 (CEV) emission norms on Tuesday. The more-stringent emission norms became applicable for construction equipment from April this year.

The upgrade of its entire range of vehicles to the new emission norms opened up several new export markets for JCB India in Latin America and some parts of Europe which were previously inaccessible, Shetty said.

This could significantly improve JCB’s exports, which presently stand at 15% of total sales volumes to about 20-25% in the mid-term. JCB already exports to 110 countries from India.

The Rocester, England-based company operates five manufacturing facilities through JCB India. Work is ongoing on the sixth factory in Vadodara at an expense of Rs 650 crore. The plant will focus primarily on exports.

The company had stopped investments in the new plant when the second wave of Covid-19 hit the country but the project has now been resumed and production there could start as early as the first quarter of 2022, without any delays, Shetty said.

JCB also plans to soon launch material handling equipment to be used at warehouses and airports in India. The company already manufactures these in India for export markets.