Trends and developments of construction equipment market

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Almost all major construction equipment companies across the globe have established a presence in India either as joint ventures with Indian companies or as independent entities. Similarly, on the demand front, the Indian consumer has realized the importance of value proposition rather than money, thereby shifting the demand curve towards value driven products, more importantly quality services.

Roads and Highways sector has been and continues to be one of the key drivers for growth for the infrastructure sector in India. India needs roads, both in rural and urban areas to progress. The government has shown significant focus on building a world-class road network. Thus, there is a substantial budget outlay in successive National Budgets towards this segment.  Investments that have been earmarked for this sector presents a great opportunity for the OEMs.

Amidst these movements there are few driving factors and trends that is encompassing the demand for construction equipments. Some of them are analysed below.

Customisation

The fast-changing and varied requirements of a developing nation. It is no longer enough to create one machine and expect to suit the needs of all. Buyers have become more educated and demanding in terms of wanting machines suited to the kind of work and environment that they work in. Customisations have to be in sync with the market and the on-ground realities for making the most of it. Simple software customisations help keep a log of the machine’s data for future reference. It also helps keep track of the machine’s numbers in terms of efficiency and fuel consumption. The customised software help run troubleshooting and diagnostic measures to ensure safety and efficacy of the machines.

Operational Safety

Comfort and safety of an operator are of paramount importance as it not only ensures safe operations at the construction site, but also increases the efficiency of the operator. Nowadays  compactors are provided with isolated operator platform, there is no feeling of vibration of the machine. This improves the stress-free operation of the machine & improves the operator’s efficiency. A conveniently positioned control on the operational panel allows easy switching of work modes, depending on working conditions. The unit also offers variable drum vibration frequencies  allowing faster and easier reactions to changing soil types and conditions.

Image Source: Ammann India

Automation and IOT

At present, there is a shift towards increasing automation, production enhancement, and safety. A lot of innovations are also taking place to develop equipment specifically customized solution. There is an adaptation of control methodology in relation to accuracy, repeatability, and efficiency Firms are using modified mechanisms and electrical sensors to ensure safety guidelines. There is a definite shift towards adoption of newer technologies for industries as well which can be seen in specifically in the crane system modulation. With changing times there is a demand for the MHE model that yields a quicker ROI than ever before. Even companies who are replacing or upgrading their existing range of material handling equipment are inclined towards technology that is efficient. The Internet of Things (IoT) is one of the hottest topics in the construction sector, and with good reason. It influences the interaction of technological, economic, social, societal, and individual changes. IOT is being implemented in construction for data gratification and safeguarding of products.

tower crane
Image Source: Everest Engineering

Training gaining importance

Achieving man-machine integration to maximize the output keeping the cost of operations minimumis what the operator is trained for. JCB, CASE, MAHINDRA and other companies are doing elaborative work in this regard.

Hands free communication systems

People understand the benefits of using a hands-free communication system and being trained to use this technology for minimal error in operations thereby leading to increased productivity. M2M communications space allows communications to happen between Machines. The advent of sophisticated electrical controls through various sensors and inverter drives, it is possible to achieve the same level of control and smoothness of operations using electrical drives.

Sustainable Construction

Go green movement is gaining strength with increased global warming and climate changes. Going green in transportation projects implies environment friendly construction of roads with the availability of alternative materials and the unique question of disposal of non-decaying waste posing a problem for environmental protection. With increased industrialization and growth of population with increasing quantities of waste world over together with increased demand for traditional road construction materials such as bitumen, cement, aggregate etc, the question is of sustainable development. With advances in science and technology, the use of non-decaying materials such as Plastic, Blast furnace slag, Fly ash, Scrap tyres, Mine wastes,  etc, offer an economically viable and sustainable alternative towards increasing demand for better road construction. In this way these materials can be utilized in an eco friendly way, providing solutions to their disposal with a commitment towards development of infra.

 ‘Value Engineering Programme’

The Ministry of Road Transport and Highways, has decided to implement a “Value Engineering Program” to promote the use of new technologies, materials, and equipment in highways projects executed either under PPP mode or public funding mode. The objective of the programme is to use innovative technology, materials and equipment to reduce the cost of projects and make them more environmentally friendly, while simultaneously ensuring that the roads or bridges and other assets get constructed much faster, are structurally stronger and more durable. 

The NPE will examine all technical matters involving the new technologies, materials, and equipment referred to it by the concerned Engineers or concessionaires/ contractors. The NPE will also resolve the technical issues which arise as a result of differences in view between engineers and concessionaires/contractors regarding the implementation of the new and innovative technologies, materials and equipment. In addition, it  will also decide about the need for field trials of any new or innovative technology/materials/ equipment before its adoption, and  finalize associated design approaches, construction methodologies/sequences as well as the relevant specifications/codes/ guidelines so that the contractor may use the proposed new/alternative materials/technologies/ equipment in project highway.

construction equipment market

Asia Pacific Zone Demand

The Asia Pacific construction equipment market is growing rapidly owing to several construction & infrastructure transformation activities in the developing countries including China, India, and Indonesia. The building sector is experiencing government & private investments as a part of the national development and urbanization strategies. The public facility enhancement projects for improving the rural areas in various Asian countries is a major driver for the market.

The material handling machinery usage in Asia will grow due to the rise in industrialization with industries demanding technologically-advanced material handling solutions. Additionally, various government plans & investments to enhance the energy & utility sectors for increased foreign trade income is driving the construction equipment market demand in the Asia Pacific.

The rising demand for new machinery has been witnessed owing to the requirement from a rental provider who further supplies to the end-users at lower prices. Owing to the high initial investments in buying new machinery, customers are increasingly opting for rental machinery, driving the sales of new machinery in the Asia Pacific construction equipment market. The Asia Pacific construction equipment aftermarket is witnessing the growth and will grow at a CAGR of 8% from 2019 to 2025 due to the technical improvements by major manufacturers. These include fuel-efficient and low carbon-emitting systems that support environmental conservation initiatives and fulfill various regulations. In the construction industry, regional governments have set several standards for machinery utilization including pollution levels and operator safety. As a result, the manufacturers are developing legally-compliant replacement parts & components, further supporting the Asia Pacific construction equipment market development.

In the Asia Pacific construction equipment market, India is expected to grow at a CAGR of over 9% from 2019 to 2025 due to high infrastructure investments for developing highways, railways, and other public infrastructures. According to IBEF, the number of construction machine sales in India from April 2017 to March 2018 was 97,000 units. Moreover, the focus of the Government of India on enhancing public facilities and providing the citizens with efficient roadways & highways throughout the country will support industry growth.

Conclusion

According to KPMG, India is set to become the third largest construction market in the world by 2025 with a size of $1 trillion, thanks to ramped up activity in the roads, buildings, irrigation, urban infrastructure, and railways. India has the second largest road network across the world at 4.7 million km. The National Highways Authority of India (NHAI) plans to build 50,000 km of roads worth US$ 250 billion by 2022 as part of a long-term goal of doubling the length of the national highway network to 200,000 km. Therefore, more provisions and developments will be foreseen in the upcoming days.

Info source:-

  1. ibef.org
  2. deccanchronicle.com
  3. Economictimes
  4. Times of india
  5. rncos.com
  6. 6wresearch.com
  7. gminsights.com