Growth of Diesel Generator Business in India Essay
According to some market research, there is a demand-supply gap of about 17% in power generation. This has thrown open huge market opportunities for the power backup providing companies. The power backup market in India is growing at an annual rate of 15-20%, varying within the three different segments – generators, UPS and inverters. Major players like Kirloskar Oil Engines Ltd (KOEL), Mahindra-Powerol, Cummins India, Greaves Cotton, Ashok Leyland, Eicher, Caterpillar, MTU and few other imported brands are seeing huge market potential to grow in India.
“India’s power market is growing faster than most other countries. With an installed generation capacity of 147 GW, generation of more than 600 billion kWh, and a …show more content…
The Indian market can be broadly divided into three segments namely the small diesel generators (15-75 kVA), medium diesel generators (75.1-375 kVA), and large diesel generators (375.1 - 2000 kVA).
With the successful auction of 3G spectrum in May 2010, major telecom firms such as Bharti, Reliance, and Aircel have made huge investment in acquiring frequencies across major urban regions such as Mumbai and Delhi. New telecom towers are expected to be added to accommodate the needs of 3G service deployment, creating a fresh wave of demand for diesel generator sets in the range of 15 - 30 kVA.
The telecom sector was the key growth driver for the small diesel generator set market in the recent past. The 15 - 75 kVA diesel generator set market witnessed a slight slowdown in the last years on account of saturation in certain telecom circles which necessitated several tower infrastructure firms to place their tower addition plans on hold. However, with the advent of 3G services in 2010, the small diesel generator market is expected revive and project high growth rates.
Although market prospects look upbeat, there are some challenges clouding the landscape. Import of low cost