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Construction equipment is the core of infrastructure development in India because no construction activity is possible without these heavy lifters. With the Union Budget 2023-24 focusing even more on infrastructure development in the country, the demand for Construction equipment is expected to see a boost in the coming years. However, many questions concerning sustainability, alternate fuels, electrification, and rental businesses correlated to the Indian construction equipment industry lay unanswered. Lets dive into the current status of these prospects and how they can evolve the construction equipment industry in the upcoming years.

Sustainability with Alternate Fuels

Today, almost all construction equipment runs on diesel fuel, a refined component of crude oil. Diesel is the most efficient non-renewable fuel for heavy engines across all construction equipment. However, diesels harmful emissions are the major cause of some respiratory diseases in humans and global warming in general. High emission levels and limited fossil fuel reserves render diesel-powered machines non-sustainable in the long run.

In my vision, alternative fuels will be a fair play for the future of the construction equipment industry as the Government is also pushing the same for making India self-reliant. With bio-diesel, compressed natural gas (CNG), liquefied natural gas (LNG), hydrogen, ethanol and electricity, construction equipment manufacturers have many alternative fuel options for new designs of machines leading to greater sustainability in the long run. Since Construction Machines are employed at a single site, refuelling them with alternative fuels right at the work site will be much easier for the owner or the aggregators.

Electrification of Construction Equipment

While progressing towards inexpensive alternative fuels, manufacturers are also pushing for electricity-powered machines because electric vehicles are considered the epitome of technological progress. Electric vehicles offer zero harmful emissions, futuristic design, low running cost, and next-gen technology. Around the globe, many models of electric equipment are showcased with artificial intelligence for higher safety and efficiency. As a new beginning to the electric saga, manufacturers are now showcasing and launching new electric Excavators with enough battery capacity to last one construction shift of eight hours. These electric machines will drastically reduce the running cost and need for frequent maintenance, decreasing downtime and enhancing productivity.

This progress will reduce the harmful emissions at the construction sites of the future thus improving the working conditions for the workers. Electric machines offer lower running costs and have the potential for better returns. Thanks to the new initiatives by the manufacturers in the construction equipment industry, the sustainability quotient will reach a whole new level.

Evolving Rental Businesses

As the Indian economy is moving towards new heights, more people are entering small to medium-scale businesses. Among these businesses is the rental of construction equipment. The requirement of heavy capital for starting a rental business of construction equipment pushes the owners to look for used construction equipment. However, the sales of new machines will also see a boom thanks to the Governments efforts towards infrastructure development. Speaking about new construction machines, a fleet of diesel machines would require lower initial capital than electric construction machines. The availability of equipment running on alternate fuels will help rental businesses to diversify their fleet and reduce net carbon emissions.

The construction equipment market is expanding annually and so is the used construction equipment market. At present, for every sale of a new construction machine, a used construction machine is sold depicting the size of the pre-owned market. The pre-owned market is expected to grow steadily in the future because used construction equipment provides far greater value when compared to new equipment. Hence, rental business owners of construction equipment are more likely to buy used diesel machines instead of new ones.

Shriram Automall India (SAMIL), an ISO 9001:2015 certified company, is Indias largest Phygital pre-owned marketplace and offers a one-stop shop for all the needs of used construction equipment for different applications. SAMIL began its journey in 2011 by setting up India's first professionally managed and organised auction platform for buying and selling pre-owned cars, commercial vehicles, construction equipment, farm equipment, three-wheelers, two-wheelers, etc.

The used construction equipment market is still highly unorganised. However, organised players like Shriram Automall India have played a significant role in making it organised throughout the last 12 years. At present, the market share of organised players is around 20 per cent against the unorganised ones which has doubled from just 10 per cent a decade ago.

We are backed by CarTrade Tech and Shriram Finance, and operate more than 120 automalls across India where customers can visit, inspect and bid for their choice of construction machine. With thousands of auction events conducted every month, we provide plenty of opportunities to our buyers with multiple bidding modes such as Physical, Online and Phygital (Physical + Digital) through our automalls, online and mobile applications respectively. We provide inspection and valuation services of vehicles and equipment through Adroit inspection services and innovative car buying and selling experience through BlueJack. Our ThePriceX application is powered by artificial intelligence and statistical modelling for delivering precise prices of used vehicles and equipment from any source and geography in India.

Conclusion

Moving towards the closure, I would say that it is high time that the construction equipment industry does the research and development of new-age machines running on alternate fuels that the Government is mulling over apart from going fully electric. Higher efficiency is the first thing new customers will look out for and is only possible through cutting-edge technologies. Furthermore, there is a high requirement for better features and advanced tech in the new construction machines that would give its users better productivity and ultimately higher returns.

ABOUT THE AUTHOR:
The article is authored by Sameer Malhotra, CEO, Shriram Automall.