No time to unwind, regaining the pre-COVID peak

CVF Off Highway, India’s premium conference brought together senior professionals from construction, mining, earthmoving, tractor and agriculture equipment industry. Its second edition took place on 10 Mar 2022 in person at the Eros Hotel in Nehru Place, New Delhi.

The event welcomed 250+ senior level executives as attendees, 40+ industry experts as speakers and 35+ partners. CVF Off Highway has always been appreciated for its premium content and excellent on ground execution which industry colleagues have been missing owing to the pandemic.

Mr. Harshvardhan Sharma, Head – Auto Retail Practice, Nomura opened proceedings with an inaugural presentation on Indian Off Highway Industry Overview. He talked about, the macroeconomic overview and global GDP growth and said “The pandemic saw more than twice the impact we probably saw in 2008-2009 and we believe that with on going geopolitical situation, inflation & policy tightening it will impact most of the economies however, good news for India is that it is leading the pack and we are likely to continue a 7.8% forecast amongst our peers.”

Our first panel of experts debated on how the Construction and Mining Equipment segment faced similar challenges during the pandemic as most industries & how it bounced back much faster on the back of infrastructure spending and robust rural demand despite the second wave.

The moderator for the session Mr. Ashish Modani – Co-Group Head and Vice President, ICRA Limited set the tone of the session and discussed how things are for the industry at present, what is the outlook for the next year and what are the key trends.

 Mr. Jaideep Shekhar – MD (Asia & EMEAR), TEREX (Material Processing India) said “last financial year industry has seen a 3% growth however Q3 was surprisingly below everyone’s expectations and there was de-growth in the industry by roughly 23%. He felt that supply chain issues are an important factor behind that; however, the concrete machinery segment and materials processing segment did pretty well.”

According to veteran industry expert, Mr. Anil Bhatia, “if you look at the overall scenario you will have short term hiccups because the geopolitical situation is very volatile as finance rates go up, new equipment sales will go up and go down.”

Mr. Sanjay Bajaj– VP, Head of Product Management, Wirtgen India Pvt. Ltd said “In India what we have seen in the last 1-2 years is more than 40-50% first time buyers or the new players coming into this, you just can’t rely on the existing players as they are also going into the subcontracting mode & we need to penetrate more into new markets and have tailor made kind of products they can afford”.

The next Panel Discussion of the day shed light upon Tractor & Farm Equipment. The moderator for the session, Mr. Rahul Bhargava – Director Management Consulting Automotive Sector, PwC India covered how the future of Tractor & Farm equipment is going to look like.

Mr. Jujhar Singh Virk – President & Group Head (Strategy & Growth Avenues) at International Tractors Ltd (Sonalika & Solis) talked about farming practices in the past and how they will shape in the future, he added “Last year tractor industry crossed turnover of commercial vehicles in terms of numbers and is a continuous growing trend. Last year in India over 9 lakh farmers bought tractors from manufacturers.” He further added that foreign countries like Germany, France, U.K and U.S.A have also started accepting Indian manufactured tractors.

Mr. G S Grewal, Mr. Jujhar Singh Virk and Mr. Pradeep Rajan pointed towards the good potential of the farm machinery sector in India.

We learnt that the contribution of tractors is over 90% in the farm equipment industry (INR 38,995 crores) and how in 2020 for the first time ever tractor sales overtook sales of Commercial Vehicles and the underlying changes in the demand for drivers shall also change how the tractors of the future shall evolve.

The next Panel Discussion focused on “Digitization, Connectivity and Automation”. The moderator, Mr. Ashim Sharma – Partner & Group Head Business Performance Improvement, NRI Consulting & Solutions, said “When we talk about the segment of connectivity, digitalization and automation in off highway segment lot of thoughts come to our mind and lot of use cases are also around us starting from not thinking about these machines just as products infact products plus services loaded on to become solutions both in the farm as well as construction sites.”

Mr. S.K Jaruhar – Consultant, Kobelco Construction Equipment India Pvt. Ltd. added “that he got a first look at the telematics system way back in 2010 when he was associated with Volvo construction equipment, which was very innovative and unexpected.”

Mr. Ashish Jangale – Head Precision Farming Solutions, Mahindra Tractor spoke candidly on how “Digitization and connectivity opens a whole lot of new use cases in agriculture like land preparation, crop care and harvest which are three major stages in a crop growth cycle. In today’s scenario, iron equipment can now be connected to IOT devices sensors. These sensors can measure properties of soil on the go.”

At the end of the session a very important question was asked by one of the attendees about haulage vehicles, and the abuse and safety factors & the whole panel contributed in answering that.

This session summed up how the emergence of new and advanced technologies are empowering owners, operators & dealers to access real-time updates on machines and insights into work sites on the go.

Our third panel discussion of the day shed light upon a very interesting hot topic in talks these days – “Electrification and Hydrogen” has its time come? This panel discussed new business models, the way customer expectations are changing, the way OEM’s are developing technologies. All that in itself is changing the way we see agricultural and construction equipment.

The panellists also threw light on battery manufacturers, software capabilities of India, electric combustion and electric mobility to name a few. The session was summed up by talking about the role of electrification and other alternative fuels in the off highway equipment industry.

The last panel discussion of the day was on “Off Highway Vehicle Rental, pay per use and financing in the post COVID era.” This panel discussed how we have been equipment buyers rather than renting equipment which makes a lot more sense economically. A few trends from the automotive industry like ola and uberization of the vehicles have trickled down to construction or off-road equipment. India has been adopting many of these trends like emissions, technology transfer or business models from the automotive into the off road but on the other hand there arises a challenge on the cost front that keeps increasing.

Mr. Drone Tewatia Lead – Marketing & Business Development & KAM, PV Clean Mobility Technologies, Mr. Deepak Gupta – Vice President Business Development, Bharat Forge and Mr. Hrishikesh Kulkarni – CEO, Nandan Petrochem Limited were also present & gave some insightful presentations.

That brought us to the end of a rather action-packed day. Lots of interesting panel discussions and presentations which were quite useful and worthwhile.

The next edition of CVF Off Highway will be held towards the first half of March in 2023 in person in New Delhi and based on the phenomenal response received for the most recent edition, the organisers expect a gathering of over 500 delegates, 60+ speakers and over 50 partners.