Construction equipment market grew for first 6 months

Construction equipment market grew for first 6 months
“We expect the market to grow by middle of the next year and our plan is to grow faster than the market,” says A. M. Muralidharan, President, Volvo CE India
The construction equipment sector seemed flat in last year, but with the promise of 12th Plan, the sector is looking bright. A. M. Muralidharan, President, Volvo Construction Equipment India, shares his views on the market, their future plan as well as government’s role in the growth of the market.
2012 at a glanceThe market grew for the first six months of 2012 as compared to 2011, and we expect to finish the year at a flat market.
VOLVO CE’s performance during 2012Even though there was an overall reduction in the size of the total market for construction equipment, Volvo Construction Equipment globally showed considerable growth in the second quarter of 2012, posting a solid set of financial results that saw sales in the 3 months up by 15 per cent. However, in the third quarter, the sales declined by 9 per cent because of the slowdown in different markets as well as the lowering of demand in the mining industry.
Challenges & road aheadThe construction industry has faced some challenges which the government is keen on addressing. Delay in infrastructure projects because of time and cost overruns is one of them. Shortage of funds, environmental concerns and delay in government clearances added to this. Project delays have been caused due to land acquisition challenges, causing major investment deferrals by companies. There is also a lack of structured regulatory and policy framework for PPP models which needs to be addressed.
However, the environment is beginning to look up as the government is planning to invest $1 trillion in infrastructure during the 12th-Five-Year Plan. According to reports, the government is planning to set up a panel led by the prime minister to speed up approvals for road, rail and port construction, including as much as $18 billion of stalled projects. It has also eased norms for transfer of land for PPP projects, allowing acceleration of infrastructure projects in several sectors such as railways, civil aviation and ports which are required to boost economic growth.
Expecting turnaround in 2013The Indian earthmoving and construction equipment (ECE) market has significant growth potential. As per a CII-IECIAL report, it has the potential to grow from $3.3 billion in 2010 to $22.7 billion by 2020. It other words, it can grow from over 60,000 units in 2010 to 3,30,000 in 2020.
As the Government of India is planning to invest during the 12th Plan, we feel confident that the market will come back somewhere around mid-2013.
Target for 2013We expect the market to grow by middle of the next year and our plan is to grow faster than the market.
As a market leader, Volvo CE has been able to increase market share in key products and markets. The customers always prefer the assurance of a dependable, strong brand such as Volvo. And being a part of the Volvo Group means that we have been actively investing in technology for the future, even in the depths of the downturn. This will make us a stronger company tomorrow.
The actions what we take at Volvo CE will enable us to emerge stronger, leaner, more efficient, and more profitable when the markets improve. Not only that, our product range will be of a higher quality and better focused and supported. Our recent launches, for example, include a new series of excavators that is more productive and fuel efficient.

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