'Vision 2020: Commanding New Heights', a study on the CE industry by the Confederation of Indian Industry (CII) and the Indian Earthmoving and Construction Industry Association (IECIAL), forecasts the cumulative annual growth rate of the Indian CE market to be around 19-22 per cent, with the market size reaching $20-25 billion; this volume is expected to increase from over 60,000 units in 2010 to 3,30,000 units by 2020. This growth forecast is based on the structural changes seen globally in the CE industry since 2006, the stagnation in developed economies and the emergence of new markets in the BRIC nations, especially India and China. India's increasing share from two per cent in 2004 to six per cent in 2010, growing urbanisation, shortage of skilled manpower, India's planned investments of $1 trillion in infrastructure, are all also factored in.

However, consider the ground realities: the high cost of funding, devaluation of currency, and fluctuating input costs that have put a additional pressures not only on the OEMs but also on the end-user segment, which in many cases, have adopted a wait-and-watch policy. The buying pattern during the pre-recession period, where a customer invested in higher capacity machines than actually required with the belief that he will have enough projects, exists no more. Post-recession, the order book seems to be over-flowing but the delivery doesn't take place. The enthusiasm which the industry displayed at the EXCON 2011 seems to be under a cloud.

Often, what is not taken note of is the capability of SME sector, which forms the backbone of the supply chain, to absorb these unforeseen pressures. For many of the OEMs, the major drive is to localise to optimum level to bring a balance but additional pressures on SMEs can seriously impact the quality of the deliverables.

The majority believes these blips are temporary in nature, and that the CE industry is poised for sustainable growth. The need of the hour, as expressed by the industry, is to rationalise taxes and duties, put more focus on manpower development, limit the import of used equipment and develop a comprehensive roadmap for the introduction of safety and emission norms. All these will definitely go on to build the confidence quotient which is currently at an all time low.

EQUIPMENT INDIA wishes all the stakeholders, OEMs, component manufacturers, financiers, and our dear readers, a Happy New Year and a 'more confident' financial year...