It has been a kind of roller coaster ride for the elevators and escalators market in India in the last 4-5 years. After a lean period in the early part of the ongoing decade, the industry experienced amazing growth starting with the second half. Then, the slowdown happened. Now, there are indications of revival again.
Kumar Ramesh, industry analyst - South Asia & Middle East, environment, building technologies & general engineering, Frost & Sullivan, sums up the market dynamics. He says: “The Indian elevator and escalators market witnessed more than 25% year on year growth from 2005 to 2007. However, due to the economic slowdown and its impact on construction sector largely during the second half of 2008 has resulted in a slump in the elevators and escalators sales. But, the future still looks promising as the construction activities are slowly but surely increasing with the rolling out of stimulus packages, reduction in lending rates by banks etc.”
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The players The Indian elevators and escalators market – as also pointed out by Ramesh – is dominated by international players Otis and Kone. Other key organised international players active in this business include Mitsubishi, Schindler, ThyssenKrupp, Fujitech and Hitachi. Also, there are several Indian players of various sizes (like Eskay, Easa, City Lifts, Acme, Eros, Hindustan Engineers, etc.) who are basically active within their regions.
Johnson Lifts is possibly the sole Indian player who’s also making a mark at the national level. (Bharat Bijlee’s Olympus brand was acquired by Kone in 2004). The Kinetic-Hyundai joint venture of course is between an Indian company and a South Korean firm.
According to industry estimates, nearly 1/3rd of the market used to be serviced by the unorganised sector during the boom time. However, now it is expected that many of the unorganised players have had to shut down their shops during the recession reducing the overall share to 1/4th. With the organised players intensifying their activities, the role of unorganised players is likely to reduce further in the next 3-6 months, feels an industry insider.
Besides the manufacturers of elevators and escalators, there are several players both Indian and international who supply components and parts and/or are engaged in repair and maintenance. These include TL Jones, Wittur Group, Pioneer Alloy, Wells, Shubham, Dulocos, Apex, Hindustan Engineers, Bharath Engineering, Esquire Engineering, Jupiter Group, Real and many others. With various sizes and capacities, most of these players primarily focus on their regional markets. Elevators market The elevators market has been growing quite steadily in the last few years. This explains why foreign players are finding the market attractive. For example, ThyssenKrupp started its India operations in 2002 while Hyundai entered into a JV with Kinetic this February. “India is one of the largest growth markets for elevators and escalators in the Asia region. The construction boom is resulting above all in the building of larger airports and modern shopping malls, office towers, hotels and apartment blocks. ThyssenKrupp Elevator (India) has been growing constantly over the last few years since it started off,” says Dr Monica Soffritti, head- communication & marketing, ThyssenKrupp Elevator AG.
Of course, despite the new entrants, Kone and Otis continue to be the market leaders. Otis had engaged a private company for market research sometime back. According to the study conducted by this company, the elevator market was growing in the last 3-4 years at about 15% annually and for 2008 it was estimated to be in excess of 30,000 units. There has been the slowdown but Raghib Azmi, GM - new equipment, sales & marketing, Otis Elevator Co (India) Ltd feels that the slowdown is mainly in the metros and surrounding areas which impact most of the commercial and up-market residential projects. Azmi’s opinion is based on customer feedback and general industry news.
“The areas outside the metros are continuing to see same level of growth in the residential segment which has driven developers in the fringes of metros to move towards affordable housing. We sense a cautious optimism on part of the industry on the start of an upward movement towards the end of the year. With so many variables we estimate the market to be range-bound between 27,000 to 30,000 units,” he says.
The elevator market is primarily divided into five segments: residential, offices, retail, hotels and hospitals. “The residential segment is the largest, which was close to 70% of the overall market in 2008,” says Azmi. For the ongoing year, he estimates an increase in the residential segment to between 70-80%, with a focus on affordable housing. Ramesh points out that use of elevators has become mandatory for any multi-storey building having three or more floors. This obviously has been helping the industry.
Speaking about the future outlook for the elevators market, he says: “With the number of sky rise building on the rise and many commercial building projects lined up in different cities, the demand for high speed elevators in particular is expected to witness a decent growth.” With the major cities cramped for horizontal growth, the trend of vertical expansion will become a necessity in the near future. The number of high-rises is already growing not just within the big cities but also on the outskirts. This will definitely help the elevators industry grow.
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