The demand for construction and mining equipment has been hit hard in the last couple of years, largely due to the high interest rate regime and slowdown in infrastructure. The last year, especially, saw regulatory roadblocks, liquidity crunch and lack of investments which all led to a sharp decline in the demand for mining and construction equipment. Stalled projects and slow pace of infrastructural investments were amongst the key factors that hurt construction equipment volumes while the curb on mining in several geographies impacted demand for mining equipment.
There´s more. The slowdown in demand for equipment sector has directly impacted the prospects of component, accessories and spares industry with the sales declining sharply. Most of the players are currently focusing on the quality of the products and after sales support rather than going in for fresh investments. The industry is cautious in their approach towards the future. This trend is currently visible in across the ´C.A.S.H´ sectors. However, the long-term demand drivers, primarily the infrastructure needs for the economy, remain intact. A study by IECIAL and CII along with Accenture, shows that the Indian CE industry has the potential to grow six to seven times from total revenues of $3.3 billion in 2010 to $22.7 billion in 2020 with multiple benefits to the economy. The equipment sales volume is expected to increase from over 60,000 units in 2010 to 330,000 in 2020.
Looking at future prospects, equipment players are framing new business strategies to woo the customers. Exhibitions are an ideal platform to attract the customers and bring back the lost confidence in them. It´s show time. Now, players in the component, accessories and spares sector, as well as the CE companies, are gearing up for Excon 2013, South Asia´s largest event for the construction equipment sector to be held in Bengaluru on 20-24 November 2013. If the players are focused and optimistic about a positive growth in the years to come, Excon 2013 will only help boost that confidence.