Momentum is a concept in Physics; in scientific terms momentum is not simply the movement of an object but also the power residing within that moving object—the faster an object moves, the more powerful it becomes. After a spell of global gloom in 2008-09, the Indian economy showed remarkable recovery in 2010. And that momentum is gathering pace. At six per cent growth in the economy, infrastructure grows at 12 per cent which in turn, fuels the growth of construction equipment by 20 per cent. As per reports, India is now poised to grow at nine per cent per annum and is fast emerging as a global manufacturing hub.
As per data gathered by EQUIPMENT INDIA–by 2015, Chindia will control 60 per cent of the global demand for mining and construction equipment. India is currently the fourth largest construction equipment market in the world, and its share in the global demand has grown from three per cent in 2006 to six per cent in 2010. It is likely to grow further to eight per cent by 2015, as its growth rate is expected to outpace most other markets over the next few years. Whereas, China, now constitutes nearly half of the production and consumption of global demand compared to 20 per cent in 2006. The American and European markets continue to languish after the global economic crisis, and their share of the global market has declined from 25 and 21 per cent in 2006 to 11 and 13 per cent in 2010, and is expected to go down further in the coming years.
The change in the structure of global demand will force all manufacturers to increasingly move their production bases to where the most active markets exist, and that will mean that there will be an increasing focus on production in India and China. India and China are both expected to benefit immensely from this massive change in the structure of demand, and both can look forward to high levels of inward investment. Obviously, as experts point out, this will have huge implications for everyone’s future business models in terms of the location of production facilities, the development of component suppliers, logistics, used equipment disposal and financing. The Indian auto component market is already estimated at $26 billion for 2010-11 and is likely to accelerate by four times to $113 billion by 2020, of which 35 per cent will be contributed by exports. The economics of mass production will further catapult the cost advantage for beneficial margins and for R&D and in turn strengthen the hold on this market.
With bC India around the corner, the momentum can only accelerate!