TOKYO -- Hitachi Construction Machinery forecasts Indian sales growth of 43% to 57.8 billion yen ($576 million) for the fiscal year ending in March, with the market's share of sales surpassing that of China for the first time.
India looks to account for 8% of Hitachi Construction's total sales compared with 7% for China. Just three years ago, India earned 4% of sales while China brought 14%.
The Japanese company's fiscal 2016 estimates call for an 8% decrease in overall sales to 700 billion yen, with net profit plunging 43% to 5 billion yen. Slipping resource prices, the slowing Chinese economy and the strengthening yen led Hitachi Construction to lower its projections in late July.
The fall of commodity prices such as crude oil and copper quickened around 2014. Global demand for hydraulic shovels decreased 30% in the past three years and is expected to hit 148,000 units this fiscal year.
Yet India's rail and road infrastructure projects began to accelerate under Prime Minister Narendra Modi, defying such global trends. Hitachi Construction and India's Tata Motors have a joint venture that commands a leading 40% market share. The venture's sales network and rising demand have created synergies, making the company competitive against rival Komatsu and Caterpillar.
"India's market growth can underpin the falling markets in other regions," said Tetsuo Katsurayama, Hitachi Construction's chief financial officer.