Chennai: The construction equipment sector experienced a sluggish start to fiscal year 2025, with a 5% year-on-year growth in sales for the first quarter. According to data from the Indian Construction Equipment Manufacturers’ Association, 28,902 units of construction equipment were sold during Q1FY25. This growth is notably restrained, reflecting the broader challenges faced by the industry amid reduced infrastructure investment and the impact of the recent general elections.
The quarter’s performance underscores a deceleration in the sector, with the growth figures constrained by decreased infrastructure spending during the election period. While sales in three key segments saw increases, two segments experienced declines. Comparatively, the quarter-on-quarter sales figures showed a significant 29% dip, although this slowdown was somewhat less pronounced than typically observed in election years. Industry experts anticipate a recovery in sales as infrastructure spending resumes post-monsoon.
Kobelco Construction Equipment India, a major player in the sector, has reported advancements in indigenization efforts at its Chennai facility. The company’s recently launched SK80 Excavator, which boasts over 70% local content, marks a significant milestone in its Make in India initiative. Additionally, Kobelco’s Sri City plant, following a Rs75 crore expansion investment, has ramped up its production, with 10-12% of its 3,500 annual units earmarked for export to Middle Eastern and African markets.
The modest growth in construction equipment sales highlights ongoing challenges within the industry, including the impact of macroeconomic factors and political cycles on infrastructure investment. As the sector navigates these hurdles, the focus will be on gauging recovery trends and the potential for increased sales in the upcoming quarters.
