7/29/2019 Offhighway - IECIAL Presentation - April 2012
1/16
April 2012
A Review ofThe Construction Equipment Industry
in India
Presented to
7/29/2019 Offhighway - IECIAL Presentation - April 2012
2/16
WHO WE ARE
A Management Consultancy that specialises in the research andanalysis of international construction equipment markets.
The largest of its kind in the world.
Formed in 1981 as part of the Economist Intelligence Unit.
Management Buy-Out in 1995.Now privately owned.
Offices in:- London, England - New York, USA - Tokyo, Japan- Beijing, China - New Delhi, India
www.offhighway.co.uk
7/29/2019 Offhighway - IECIAL Presentation - April 2012
3/16
Products Included in Overview
Articulated Dump Trucks
Asphalt Finishers
Backhoe Loaders
Compaction Equipment
Crawler Dozers
Crawler Excavators
Crawler Loaders
Mini Excavators
Mobile Compressors
Mobile Cranes
Motor Graders
Rigid Dump Trucks
RTLTs
Skid-Steer Loaders
Wheeled Excavators
Wheeled Loaders
7/29/2019 Offhighway - IECIAL Presentation - April 2012
4/16
The Construction Equipment Industry in India
Real growth in demand started in 2003-2004
Huge task of infrastructure implementation to meet the needsof an emerging regional economic power
Particular growth in- roads, railways, seaports and airports- power generation: coal, nuclear, hydro- mining- urban and rural infrastructure- residential, commercial and industrial buildings
No doubting governments ambitions but ability to implement in full, and on time, is suspect
Do not compare with China
Different speeds and direction of growth
Different machine composition, now and in the future
7/29/2019 Offhighway - IECIAL Presentation - April 2012
5/16
0
20,000
40,000
60,000
80,000
,00,000
,20,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012* 2013* 2014* 2015* 2016*
India: Development of Sales, 2001-2016*(Units)
*Forecast
Annual Average 2007-2011: 53,784
Annual Average 2011-2015: 100,292
7/29/2019 Offhighway - IECIAL Presentation - April 2012
6/16
BackhoeLoaders 34%
CrawlerExcavators 34%Wheeled
Loaders 4%
MobileCompressors 6%
Mobile Cranes13%
CompactionEquipment 4%
Others 5%
BackhoeLoaders 40%
CrawlerExcavators 17%
WheeledLoaders 5%
MobileCompressors
6%
Mobile Cranes17%
CompactionEquipment 7%
Others 7%
BackhoeLoaders 47%
CrawlerExcavators 21%
Wheeled Loaders3%
Mobile
Compressors 6%
Mobile Cranes16%
CompactionEquipment 3%
Others 4%
India: Structure of Sales, by Product, 2006-2016*
(Units)2006
2011
2016*
*Forecast
7/29/2019 Offhighway - IECIAL Presentation - April 2012
7/16
Others 4%
Compaction
Equipment
3%
Mini
Excavators
11%
Wheeled
Loaders
37%Crawler
Excavators
39%
Mobile
Cranes 6%
China: Structure of Sales, by Product, 2006-2016*
(% of Total)
WheeledLoaders 62%
Crawler
Excavators17%
MiniExcavators
6%
MobileCranes 7%
CompactionEquipment
4%
CrawlerDozers 2%
Others 2%
2006
2011
Others 5%
Compaction
Equipment
4%
Mini
Excavators
9%
Wheeled
Loaders39%
Crawler
Excavators35%
MobileCranes 8%
2016*
*Forecast
7/29/2019 Offhighway - IECIAL Presentation - April 2012
8/16
India: Development of Sales, 2006-2016*(Units)
13,787
5,859
1,906
2,332
1,879
628
749
360
175
550
4,229
2,494
2,446
738
575
528
504
468
40,000
40,000
15,500
6,500
5,000
5,000
1,400
900
1,050
1,000
1,000
5,907
33,595
11,306
14,940
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000
Backhoe Loaders
Crawler Excavators
Mobile Cranes
Mobile Compressors
Compaction Equipment
Wheeled Loaders
Asphalt Finishers
Rigid Dump Trucks
Motor Graders
Skid-Steer Loaders
Crawler Dozers
2016*
2011
2006
* Forecast
7/29/2019 Offhighway - IECIAL Presentation - April 2012
9/16
India: Review of 2011 Sales
Market gaining momentum despite sluggish policy environment
Over 72,000 units in 2011
It continues to be dominated by six major products
Backhoe Loaders 47% (33% growth)
Crawler Excavators 21% (30% growth)
Mobile Cranes 16% (22% growth)
Mobile Compressors 6% (1% decline)
Compaction Equipment 3% (7% decline) Wheeled Loaders 3% (8% decline)
Growth momentum sustained by growth in high volume equipment
Roads and mining equipment witnessed decline
Remarkable growth in sales of mini excavators although sales volume is still very low
Market forecast to grow by 13% in 2012 to nearly 82,000 units
All equipment types expected to grow
83%
13%
7/29/2019 Offhighway - IECIAL Presentation - April 2012
10/16
20,000
2,446
504
575
528
11,306
4,299
14,940
468
2,494
33,595
738
9,291
11,453
25,296
3,000
600
700
650
3,000
600
12,500
4,500
875
35,000
865
2,660
540
582
529
688
4,337
2,687
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000
2009-2010
2010-2011
2011-2012*
India: Forecast Sales, 2010-2012*
(Units)
Asphalt Finishers
Backhoe Loaders
Compaction Equipment
Crawler Dozers
Crawler Excavators
Mobile Compressors
Mobile Cranes
Motor Graders
Rigid Dump Trucks
Skid-Steer Loaders
Wheeled Loaders
* Forecast
7/29/2019 Offhighway - IECIAL Presentation - April 2012
11/16
23
19
22
23
11
5
16
34
28
20
4
19
-8
-7
-1
0
22
-1
142
30
-32
-7
33
-15
39
86
-28
55
43
45
22
44
22
-3
61
-4
-50 0 50 100 150 200
2009-2010
2010-2011
2011-2012*
India: Forecast Sales, 2010-2012*
(% Units Change)Asphalt Finishers
Backhoe Loaders
Compaction Equipment
Crawler Dozers
Crawler Excavators
Mini Excavators
Mobile Compressors
Mobile Cranes
Motor Graders
Rigid Dump Trucks
Skid-Steer Loaders
Wheeled Loaders
* Forecast
7/29/2019 Offhighway - IECIAL Presentation - April 2012
12/16
India: The Future Growth Market
Huge volumes of work to be done
Infrastructure spending 12th plan: $1,025 billion Power generation
Roads Railway Airports Urban and rural infrastructure Mining
Governments total commitment to becoming regional powerbase slow, but definite growth
Will generate huge expansion in demand for Construction equipment, of all kinds Components
Support services
Indias growth is assured for the foreseeable future
Indian equipment demand will be 118,000 units by 2016
7/29/2019 Offhighway - IECIAL Presentation - April 2012
13/16
India: Challenges
Regulatory and administrative structure reforms
Gap between planning and execution
Corruption
Implementation of GST
Procedural and approval delays
Land acquisition
Environmental and forest clearance
Slow decision making Policy paralysis
Widening current account and fiscal deficits
High rate of inflation
Tightening of monetary policies
Increasing interest rates
Declining growth rate
Spiralling crude oil prices
Increasing trade deficit and depreciating value of Indian Rupee
Public Private Partnership (PPP) 50% of infrastructure investment in 12th plan
Money availability and credit growth
Long term financing options
7/29/2019 Offhighway - IECIAL Presentation - April 2012
14/16
India: Future Structure of Demand End-users becoming more sophisticated, and demanding
Move towards more specialised, productive equipment
Hydraulic excavators
Wheeled loaders Mini excavators, longer term? Telescopic handlers, longer term?
crawler dozers, motor graders, compaction equipment, mobile cranes
Move away from cheap machines at lowest price
Move towards most cost effective option, over full machine life
Increased emphasis on:
- Customer support - Productivity- Residual values PROFITABILITY- Financing options
7/29/2019 Offhighway - IECIAL Presentation - April 2012
15/16
India: The Future of the IndustryKey Features
Domestic sales 2011 72,000 units
2016 118,000 units
Annual equipment sales CAGR will exceed 10.3% over the next 5 years
Strong penetration by Chinese OEMs
Wheeled loaders, mobile cranes, graders, excavators
Strong growth in production output
More inward investment Many new manufacturing facilities by OEMs
Strong growth in component industry
India to become regional export hub
7/29/2019 Offhighway - IECIAL Presentation - April 2012
16/16
Please do not hesitate to contact the team for help at:
www.offhighway.co.uk
THANK YOU!
Telephone: +91 11 4652 5671-73
New Delhi Office
SAMIR BANSAL
General Manager, India