Construction equipment sales, a barometer of economic activity, should breach the 2018 peak associated with around 100, 000 units next year, paced by increased government spending on infrastructure projects.
“Next 12 months (2023) will be an important year. Execution of projects will all be very high, starting later this yr to next year, ” Dimitrov Krishnan , Head, Volvo Building Equipment , told ET. “There might be a little bit of a disturbance in the macro environment, which to a large extent is not just in the government’s hands. It’s also driven by global economic factors. But I do believe 2023 should be the next peak. ”
Krishnan said that rising demand for power, coupled with the particular government’s focus on facilities investment to increase economic exercise, would help boost the demand for construction gear.
“We expect to see a growth of roughly 10% this year, on the particular total market side. The growth is largely powered from segments like coal mining and handling, ” Krishnan said.
“The need with regard to power is driving need for fossil fuel production as well as import associated with coal. At the same time, we have seen a lot of focus on infrastructure, ” said Krishnan on the sidelines of the launch from the EC 550 excavator last week.
The particular Centre has budgeted the 36% increase in its capital spending to a record Rs 7. 5 lakh crore this fiscal year, with a focus on system development to spur growth.
Despite the pandemic, road construction activity also has been strong – both in FY21 plus FY22. Last year, the construction action reached close to 29 kilometers per day. With an increase in tendering activity, Krishnan expects road construction to grow further this season.
Overall, the market is poised regarding growth inside the next few years and is expected to become the particular second largest in the world intended for construction products by the end of the decade.
“It’s a market that offers huge potential. Our estimate is that the Indian market will grow simply by 2-3 times by 2030. Not only that, along with the direction that the government provides set when it comes to sustainable power solutions as relates to the electrification or use of alternative fuels, India will certainly lead the way, ” Krishnan said.
India is currently the third biggest for the industry, after the US and China.
To cash in upon the potential, Volvo CE will be investing heavily in developing products tailored to suit the particular local market, and aims to treble sales in order to about 6, 000 models in the next five years.
“So, our concentrate toward serving the Indian customer is usually both by localization associated with product and also doing a lot of engineering work out of India. We have so far developed road compactors and pavers with local R& D teams. Going forward, we will be investing in R& D work for hydraulic excavators, which are the bigger markets, ” said Krishnan.
Volvo will invest in R& Deb for that diesel engines products, as well as within future to get sustainable energy solutions driven options.
Apart from nearby sales, Volvo CE is also working at growing exports out of India. The company presently exports about 15-20% of its production out of India to markets in Southeast Asia, African, Latin America and neighboring countries like Nepal, Bhutan, Bangladesh and Sri Lanka. It has the capacity in order to produce 3, 500 devices per annum at the manufacturing facility, with utilisation levels within the range of 60-70%.