Many might not get the secondary data of the used construction equipment market in India. We will let you know a brief about the market. We will let you know the segmentwise impact, market trends, Market Challenges, Impact on second-hand construction machinery after GST in India.
Segment Impact on Equipment
Majorly 3 segment are there 1. Construction Equipment 2. lifting Industry 3. Mining Equipment
Construction Equipment
The construction Equipment segment is mainly catering to road construction equipment. This segment includes backhoe loader, excavator, soil compactor, tractor loader, tandem roller, concrete mixer, concrete pump, dumper tipper, generator, skid loader, some small equipment is there used in the road industry.
Used construction equipment is majorly bought by the new market entrant businessmen or companies. it’s the best way to understand the new market entrant, requires less investment, less risk, as compared to new construction equipment.
Even many of the experienced construction equipment rental companies or business has a habit of always buy used construction equipment. They know the benefits of used Machines.
Some of the benefits are thereof used equipment – less investment, less risk, the idle machine also not create problem to the owner due to low EMI amount.
Why generally customers purchase the used construction equipment. generally, the major 3 reasons for buy used equipment. They are the first entrant into the market, has fewer investment arrangements, the project is for a limited period of time.
Lifting Industry includes all different types of crane, lifting crane, hydra, forklift, telehandler. This is the only segment in which finds the 25-year-old equipment to use. Generally, this type of machine rented to the companies. Nowadays standard company started using under 10-year life machine. So the new lifting equipment market increase.
Every MNC and well-reputed companies want safety first. One good example that many of the companies avoid hydra & they replace it with Pick and carry due to safety issues even it needs to pay the higher rental.
So we can say lifting industry majorly focused on the new equipment as compare to the used machine.
Mining Industry is the only segment in which mostly use new equipment. Mining equipment considers above 50-ton excavator, 25-ton dumper, Haul pack dumper, Dozer. After full use or as mining gets complete they sell their machine to scrapers.
So we can conclude that the out the three industry road construction equipment use old machinery.
GST Impact on used equipment Industry.
In 2017 GST Implemented in India. Used Equipment Market badly hit by the GST. Earlier customers used to purchase the machine in 2% against C form. Cost to the first user like custom and excise that can not claim in the accounting process but as GST gets to implement. In that buyer get the credit of 18% GST.
So the price is the same for new equipment for the buyer and he got the credit of 18% but asking the same price for used equipment what he is getting earlier GST Implementation. So Used Equipment buyer a little bit divert to the new equipment those have the projects in their hands.
Related Article – Where to buy & sell Used Construction equipment
Used Equipment Impact on Economy
Used equipment is good for the business who looks for shorter time projects but bad for the economy. If the government regulates for 10 to 15-year life cycle then a new business arises. The government gets new tax, manufacturers get the business, dealers get the business, Staff of manufacturer and dealer get the employment. So the long life of the machine is negative for the economy.
Market of Used Heavy Equipment.
There is no exact figure for the used construction because it’s 80% market is unorganized still heavy equipment as per the calculation. 20,000 Crore market still is there in 2020. Tractors and trucks are not included in this calculation.
Future of Used Construction Equipment Industry
On used equipment especially cars, trucks, construction equipment Indian government may come with scrap policy soon. That might change the whole used equipment calculation. As per the reports, the mining industry is going to get the maximum benefits from that policy because they use it until it does not get scrap.