Construction equipment industry expects cost pinch of around 15% due to new CEV-V regulations, ET RealEstate
CHENNAI: The construction equipment industry, which is moving to the CEV stage V non-road diesel engine emission norms from January 2025, will see a 12% to15% increase in cost on account of both safety and emission regulations.
Dimitrov Krishnan, MD of Volvo CE India, said, “Around 40% of the CE market comes under the CMVR norms for products that go on the roads like compactors or loaders and the new regulations will mandate improved engines as well as sturdier cabins and other safety requirements.”
However, he added, there are no CMVR regulations for the balance 60% of the CE market comprising products like excavators and this lacuna needs to be addressed.
India’s construction equipment industry has been growing at a health double digit trot year on year.
“The January to June 2024 growth is at 15% while calendar 2023 saw a 20% sales growth,” said Krishnan.
This despite the general elections when traditionally CE sales go into decline as infrastructure projects grind to a halt.
“India’s CE market is one of the few that are growing globally due to the infrastructure push,” he added.
Currently the market is pegged at $8.5 billion but industry body ICEMA (Indian Construction Equipment Manufacturers’ Association) expects it to hit $25 billion by 2030.
Volvo CE, which launched its 20-tonne excavator EC210 on Tuesday, is not only stepping on the gas in the domestic market but also looking to ramp up exports, he said.
“We’re currently exporting 20% of our production, mostly compactors and excavators, to markets like South East Asia, Middle East, Africa and Latin America,” said Krishnan.
“Discussions are also on for global sourcing of components from India and a final decision is likely by the end of the calendar year,” he added.
While the 20-tonne excavator is the largest product segment in India, Volvo CE is also improving its value-add with locally sourced engines from Volvo Eicher Commercial Vehicles’ Pithampur engine facility. “We have around 65% local content in our production in India,” said Krishnan.
