Demand for heavy equipment, two wheelers down

KATHMANDU, Jan 20: Slow pace of construction works and development projects has taken toll on sale of heavy equipment.

Statistics of Department of Transport Management (DoTM) shows registration of vehicles under Crane/Dozer/Truck category declined by 27 percent over the first five months of the fiscal year 2013/14 compared to the figures of the same period previous year. According to the department only 918 units of heavy equipment were registered in the country as against 1,259 in the first five months of 2012/13.

Dealers say the slow pace of government-funded projects and big hydropower projects have affected heavy equipment business. “Construction works of mega projects, which are our major buyers, is not going on in full swing,” Krishna Poudyal, assistant sales manager of Construction Solution Company, said. Poudyal said sales of heavy equipment, however, is slowly picking up.

Construction Solution - a subsidiary of Sharda Group - is the distributor of heavy equipment manufactured by Hyundai Construction Equipment, India.
According to dealers, heavy equipment business had started declining since the beginning of 2009/10 as mega projects couldn´t take off due to political instability.
Total sales of heavy equipment had declined by around 50 percent to 1,969 units in 2010/11. Sales, however, increased by 30 percent to 1,333 in 2011/12 and around 150 percent to 3,332 units in 2012/13.

“Though sale has come down, it is still better compared to 3-4 years ago. Sale has come down as big construction projects haven´t begun in the country because of political instability,” an official at Continental Trading - the dealer of Komatsu construction equipment - said. The official, however, believed that sales of heavy equipment will gain pace in the coming days as some mega projects are likely to begin this year.

“As the country is heading toward stability, we expect that heavy equipment business to grow in the coming days,” the official added.

Registration of two-wheelers also went down by 7 percent during the first five months of 2013/14, compared to data of the same period of last fiscal year.
Data shows 72,543 two-wheelers were registered with transport offices in different parts of the country, down by 5,445 units compared to figures of the first five months of 2012/13.

Dealers of two-wheelers have attributed the decline in business to price rise in the domestic market. “Price of two-wheelers has increased in India itself. Our high taxes make the price hike even bigger,” Raju Chhetri, vice president, sales and marketing of Mahindra Two-wheelers, said. “This resulted to drop in sales.”

Registration of bus and mini-trucks also went down during the review period. However, registration of vehicles under car/van/jeep segment increased.

(Source: REPUBLICA)