The year-on-year domestic sales grew 28.5% growth while there was 3% growth in exports
The Indian construction equipment industry recorded an excellent 26% growth YoY with sales crossing the 1 lakh unit mark in FY 2022-23. CE sales in Q4 of FY23 (January-March 2023) increased by 23% over Q4FY22 and by 22% over Q3FY23. On a month-on-month basis, sales in March 2023 increased by 17% over February 2023. The significant growth in FY23 was driven by all the four sub-segments of the CE industry, except road construction equipment, which recorded a slight de-growth of 3%. A total of 77,164 units of earthmoving equipment were sold in FY23 – a 23% jump in sales as compared to 62,629 units sold in FY22. The sales of backhoe loaders and crawler excavators, accounting for over 90% of the total sales of earthmoving equipment, increased by 28% and 17%, respectively, during the year.
Similarly, concrete equipment sales went up by 26% to 11,787 units in FY23 on the back of an equivalent increase in sales of concrete mixers which contributed around 60% of sales in this segment. Material handling equipment segment recorded an impressive 47% growth, driven by a 25% surge in sales volume of pick-and-carry cranes, accounting for more than 80% of the total sales in this category. A significant increase in tele-handler sales was also witnessed with 713 units sold in FY23, compared to 342 units in FY22. The material processing equipment segment too consolidated its contribution to total sales with manifold growth in screeners, jaw crushers, impact crushers and cone crushers.
“The growth comes on the back of the enhanced pace of construction and mining activity during the year which resulted in a significant increase in demand for all types of construction equipment,” said Dimitrov Krishnan, President, ICEMA and Managing Director Volvo CE India (P) Ltd. It is estimated that road and highway construction was about 30 km per day during FY23, which created demand for machines like excavators, motor graders, crushers and screeners, etc. “The support from the Ministry of Road Construction and Highways has been instrumental in driving the demand for construction equipment as over 40% of CE demand originates from this segment,” Krishnan said.
“We are really grateful to Minister of Road Transport and Highways Nitin Gadkari for his visionary outlook for the road sector of India and we hope that this sector will continue to be a strong demand driver for the CE industry in future as well,” he added. He further urged the government to ensure the maintenance of a steady and high pace of highway construction throughout the coming years to create a sustained demand for construction equipment. He also added that a focus on debottlenecking certain issues to accelerate the pace of execution of the existing infrastructure projects would enable the industry plan better to cater to the emerging demand for various equipments.
Besides the road and highway sector, a steep increase in railway construction in FY23 clocking 14 km per day of track laying owing to commissioning of new lines along with doubling and gauge conversion, enhanced focus of the state governments towards traditional infrastructure development such as roads, irrigation as well as rural and urban development and the steady revival of the real estate industry were the other factors that contributed toward the growth of the industry and resulted in higher demand for construction equipment during the year. Additionally, a 15% increase in coal production in FY23 led to higher sales of mining equipment like high-capacity excavators, motor graders and dozers. “FY22-23 was a year that saw volumes peak to the best-ever performance with the industry sales volume exceeding the pre-pandemic level by 10%,” commented V G Sakthikumar, Convener, ICEMA Industry Analysis and Insights Panel and Managing Director, Schwing Stetter India (P) Ltd.
“Infrastructure projects including high-speed trains, metro-rail and national highway construction contributed to the growth of the CE industry in Q1 and Q2 and the growth in subsequent quarters was backed by petrol and refinery, steel plant and port development projects,” he added. Sakthikumar mentioned that with the government’s continued focus on infrastructure development and a significant increase in the capital expenditure outlay announced in the Union Budget 2023-24, the demand for construction equipment is expected to remain robust in the near term with growth expected to be around 15% to 20% in FY24.