The construction equipment sector to ‘Stable’ from ‘Negative’ following a strong ramp up in volumes.

According to you what are the key market trends likely to be seen in these times, the impact it will have for the overall construction equipment industry, specifically your area of business in this sector, what kind of demand do you foresee?

We’re seeing a lot of new trends in the CE sector, most of which include moving towards advanced technology and sustainability. In terms of technology, the pandemic instigated a rapid wave of digitalization in the CE industry. According to a report by Mckinsey, by harnessing industry 4.0 tools like IoT, AI and automation, processes will see 30 to 50% reduction in machine downtime; 15 – 30% improvement in labor productivity; 10 to 30% increase in throughput; and 10 to 20% decrease in the cost of quality. Furthermore, we are also seeing a significance of the rental and leasing segment, owing to the increase in number of projects by government. At CASE, last year we propagated a lot of financial schemes on our equipment through our financial arm CNH capital, to ease our customers’ burden.

Currently, CE industry is also witnessing a swift increase in roads, highways, and port projects. This quick increase in the projects will lead to more opportunities for industry players creating better demand of the CE equipment. This year’s budget also focuses on the need to have better infrastructure in the country which will further fasten the pace of recovery, the privatization of mining sector and further relaxation  in FDI norms will help adding the much-needed boost in the sector. The focus of the government on manufacturing sector and curating India as a manufacturing hub will help in the creation of a better eco-system for OEMs. Rating agencies like ICRA and Ind-Ra have also revised its outlook on the construction equipment sector to ‘Stable’ from ‘Negative’ following a strong ramp up in volumes.

These aforementioned trends tied with government initiatives will cater to increased project demand and at CASE we are ready to make the most of these opportunities.

Which industry segment is likely to be the biggest consumer of construction equipment? Which equipment demand is likely to be resilient in the days to come and why? Your take?

Owing to this year’s budget, we can see an increase in project allotment of the roads and highways sector. The Minister of Road Transport and Highways Nitin Gadkari has also set the target for 2026 and planned to expand around 60,000 km of National Highways (NHs) in the next five years.  The Off-Highway Research predicts that the availability of the Covid vaccine is expected to push the recovery rate further in 2021. Sales of road construction equipment will increase by 25 per cent to 76,375 units in 2021 and a further 16 per cent to 88,700 units in 2022. The construction market is forecast to touch 100,300 units in 2023 with a growth of 13 per cent.

Owing to the multiplying government initiatives in the road and highways sector we can see an increase in the demand of road equipment segment. Case India products, an embodiment of strength and efficiency, are suited to satisfy these requirements. A testament to this is the accolades which our machines have cumulated over the years for their impressive work and easy maintenance. CASE India’s equipment is being used across the length and breadth of the country as well as abroad. Few prestigious projects where our machines are being used are Sagarmala, Bharatamala and Trilateral Highway (India-Myanmar-Thailand highway) and we look forward to work in more such projects.

What is the current market size for construction equipment on rental and lease? Is the industry likely to see consolidation in coming years? Your views.

Before the pandemic, the rental market in India was in a nascent stage. Currently, as the pandemic is withering, and the construction sector projects are increasing, and we could witness a possible surge in the rental market. According to Mordor Intelligence report the India construction equipment rental market is anticipated to register a CAGR of about 5.1 % during the forecast period (2020 – 2025). The need of equipment finance is now more than before as it helps in the growth of CE rental business and offers the dealers as well as customers major advantages of cutting down on equipment acquisition cost, protection from market fluctuations, eliminating storage and transportation issues. Equipment finance helps the acquisition of equipment on easy terms, enables regular cash flow and avoids business cycle fluctuations for customers.

At CASE India, through our financial arm CNHi Capital, we are making sure there’s enough capital available for customers who wish to make purchases. CNHi Global has its financial arm which is present in India as well with the name CNHi Capital. It provides a comprehensive range of services, including wholesale and retail equipment financing support for our customers in the market-place. The service helps our customers and potential customers in their equipment’s purchases.