Despite a marked slowdown in demand due to the impact of general elections, JCB India MD and CEO Deepak Shetty is confident that the market is set to bounce back soon.
17 Feb 2025 | 3609 Views | By Shahkar Abidi
In a fiercely competitive market where over 20 original equipment manufacturers (OEMs) vie for dominance, JCB India has managed to secure a striking foothold: One in every five excavators sold in India bears its name. Despite the crowded playing field, Deepak Shetty, the company’s CEO and managing director, remains confident ...
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In a fiercely competitive market where over 20 original equipment manufacturers (OEMs) vie for dominance, JCB India has managed to secure a striking foothold: One in every five excavators sold in India bears its name. Despite the crowded playing field, Deepak Shetty, the company’s CEO and managing director, remains confident that this trend will hold steady.
"JCB has grown continuously," he said during an interaction with Autocar Professional, adding that the market size for excavators is expected to be over 30,000 units this fiscal. The crawler-excavator segment witnessed a 16% rise in FY24, touching 33,030 units. JCB operates in a fiercely competitive market, with players such as Tata Hitachi, SANY, Volvo Construction Equipment, and Hyundai vying for dominance.
These rivals have made significant inroads, forcing JCB to innovate and adapt continuously. Speaking on the sidelines of the company's recent launch of the JCB NXT 215 LC Fuel Master Tracked Excavator at its Pune facility, Shetty emphasised that the new model, engineered for both domestic and international markets, has been optimised to tackle the twin challenges of efficiency and cost-effectiveness.
According to the company, the excavator reduces fuel consumption by 14% compared to its predecessor. Advanced hydraulics, real-time fuel monitoring through an onboard interface, and remote monitoring solution have all contributed to this milestone. JCB claims that the fuel efficiency improvements could translate to annual savings of Rs 2.90 lakh per unit for its customers.
Features such as auto engine long-idle stop, further enhance these savings, minimising fuel wastage during extended idling periods. "Innovation has been the cornerstone of our operations in India for over four decades," Shetty said. "This new machine has been engineered to enhance the profitability of our customers through a significant reduction in fuel consumption."
"Through technology, this new machine will mitigate the impact of rising fuel costs," Shetty added. He also linked the development to broader economic and environmental goals, noting that improved fuel efficiency aligns with government efforts to reduce fossil fuel dependence Beyond fuel efficiency, the JCB NXT 215 LC boasts a 5% increase in productivity, a quieter engine compartment, LED work lights, and a power boost function for demanding tasks like rock-breaking.
The company’s Pune factory produces excavators ranging from 2-38 tonnes. "So, we are producing the whole range of excavators and have continuously grown our market penetration," Shetty explained, adding that JCB exports these machines to nearly 85 countries. "Excavators are an important part of our business."
He emphasised that year-on-year, his company has witnessed growth not only in volume, but also in market penetration. "This year, we should be seeing at least 13% to 14% growth," Shetty said, adding that India is at the cusp of a major boom in infrastructure development. "The country still needs a lot of development. For the next five years at least, I don't see any reduction in growth.”
Building Capacity
Capacity-building has been a cornerstone of JCB India’s strategy. For instance, the company invested in the capacity to produce 5,000 backhoe loaders per month three years ago, a move that has since been bolstered by further enhancements. Today, JCB’s production capacity is spread across multiple facilities, including Vallabhgarh and Jaipur, offering flexibility to scale operations based on demand.
However, capacity expansion isn’t limited to production alone. JCB has taken a holistic approach, addressing supplier capabilities, logistics, and transportation. The goal, Shetty emphasised, is to strengthen the entire value chain. "We are constantly enhancing our capacity across all fronts to meet increasing demand," he said.
Localisation has also played a critical role in JCB’s growth strategy. The company has achieved 96% localisation for its backhoe loaders and 75% for its excavators—significant figures in an industry where localisation rates for excavators have historically hovered around 50-60%.
Shetty, however, acknowledged that gaps remain, particularly in critical components like valves and motors, which are still imported from countries such as Japan, South Korea, and China. But he expressed optimism about the future, pointing to domestic players like Wipro, which has begun producing components such as pumps and is likely to move into other segments, indicating a sign of progress.
Navigating Challenges
The construction equipment industry in India is no stranger to challenges from election cycles, emission norms and other factors that seem to have impacted the industry growth in the past few months. Shetty believes that the industry should grow by high single digits in the current financial year, given India’s 6.5% GDP growth target. He anticipates industry growth to rebound after the initial adjustment period following the election cycle.
Another concern is the issue of illegal exports of construction equipment, which has plagued the industry. Shetty expressed frustration over the practice, warning of its long-term consequences. "When the machine goes out through an illegal route, there will be no parts and products to support it. Initially, the customer will buy the machine, but later, the country will get a bad reputation," he said. The lack of support infrastructure for illegally exported machines, he cautioned, could tarnish the reputation of Indian manufacturers on the global stage.
Industry statistics provide a sense of scale of these illegal activities – illegal exports have seen a 55% increase in just one year in FY24, with over 4,600 units of excavators and backhoe loaders valued at Rs 2,417 crore being exported illegally.
Since over 90% of construction equipment in India is financed, this issue is emerging as a great cause of concern for the banks and NBFCs. With the machinery itself serving as collateral for loans under hypothecation, unauthorised exports leave these institutions with no recourse to recover their dues in case of borrower defaults.
The Road Ahead
As the industry navigates changing regulations, global economic pressures, and evolving customer demands, JCB and many of its industry contemporaries believe they are well-positioned to maintain its momentum. However, Shetty’s cautious optimism reflects the realities of operating in a dynamic, competitive environment. For now, JCB’s ability to adapt—whether through localised manufacturing, cutting-edge technology, or expanding value chain, appears to be its strongest asset.