India set to be third-largest construction market in 2024: CNH Industrial

Stefano Pampalone, president of construction at CNH Industrial (Mint)
Stefano Pampalone, president of construction at CNH Industrial (Mint)

Summary

Infra investments spur demand for building equipment: CNH Industrial

NEW DELHI : India is set to become the world’s third-largest market for construction equipment next year, surpassing Japan, as the country’s significant infrastructure investments pave the way for increased demand, said a top executive at CNH Industrial, an European maker of loaders and excavators.

Currently, China leads the global market for construction equipment, followed by the US and Japan.

CNH Industrial’s CASE construction unit, a $3.5 billion company, has multiple manufacturing facilities in North America, South America and Europe, but India is its sole manufacturing hub in the Asia-Pacific region, where it is ramping up capacities to 10,000 units annually by the next year, making it the second-largest factory for the company globally and its largest export hub, Stefano Pampalone, president of construction at CNH Industrial, said in an interview.

“The prospects and outlook for India as a market and as a manufacturing hub are significant. We have not had a presence in China, but we see a lot of our competitors increasing their attention for this continent and specifically India, which I believe is going to see the next construction boom in the next years, reaching the number three position in the next year. So we believe considering the significant investment in infrastructure the Indian government is doing, construction will be on the same pathway as agricultural equipment was in the last 10 years, reaching almost 1 million units annually," Pampalone said.

“We are looking for opportunities to expand in India because, in the medium-to-long term, India is going to be a significant place where we want to have a play. Today, we’re looking to expand within our Pithampur (Madhya Pradesh) factory as we still have some room left there, but we are also expanding our product range to serve the non-American markets," he added.

Pampalone said that the company wants to increase its India capacity by 50% to 15,000 units in the medium term and is targeting a production of 12,000 units a year by 2025. “Our plan is to increase capacity significantly in India, and each year that will entail an investment of a few million dollars," he said. India’s construction market is peculiar in that all “wheeled" or roadable construction equipment is regulated by a set of emissions requirements, whereas off-highway or off-road equipment is not.

“The time India is taking to move to stricter emission norms has been very short, so there’s been a significant catch-up in the last few years because we moved from Stage 3 and 4 to Stage 5 emissions norms in a very, very short period of time," Pampalone said. “While 50% of our production in India goes towards exports to 105 countries, there is also an increasing focus on increasing domestic sales, considering emissions, also electrification in the future, and because the country is getting more and more sophisticated in demand and aligning somehow with what is the industry in the rest of the world," Pampalone said.

“As and when the country evolves, there is no reason for this specificity not to drive the volume mix in terms of different product lines in the market. So that’s good. We see an alignment, and also, there is an alignment in terms of emissions which is certainly important", Pampalone said.

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