The Elevator Market in India

The Indian elevator industry has witnessed rapid growth of 13.5% per annum since 2001. High-rise trend is the key influencing driver of the elevator market in the country. Vertical development in the residential and commercial building sector is a recent development that is gathering momentum across several cities in India. While factors such as rapid urbanisation, access to liveable space and escalating land costs are the key drivers of the high-rise trend, a key enabling factor is the revision and relaxation of the building norms by some of the state governments. By 2030, near 50% of the country’s population is expected to live in the urban areas, a sharp rise from the current 31%.

The Global market for elevators is estimated at around 750,000 – 800,000 units with China accounting for about 65% in 2013. India comes in next at 52,600 units and the market is forecast to cross 100,000 mark by 2018.

Passenger elevators form around 85% of the total elevator market in India. The market for home elevators, though small now, is growing rapidly fuelled by the “necessity-health” factor, changing lifestyles and increasing demand for villas and premium / designer apartments. The market is gradually moving towards better aesthetics, higher speeds, use of gearless motors and so on.

India is home to about 300-400 elevator manufacturers and the top six elevator manufacturers are Johnson, Kone, Mitsubishi, Otis, Schindler and ThyssenKrupp, with a combined market share of near 70%, in 2013. While Johnson is an Indian company, the other five are subsidiaries of leading multinationals; Japanese elevator manufacturers, viz. Fujitec, Hitachi and Toshiba are the recent entrants. Many elevator companies are expanding their facilities or setting up new green field facilities in India. Over the last decade, some of the regional players have done well and have scaled up their technical capabilities.

The country has also moved up the value chain in terms of greater sophistication in the elevator features such as energy efficient elevators, advanced safety mechanisms and improved aesthetics. However, in sheer technology terms the country has some catching up with other developed markets. The modernisation market in India, hitherto small will emerge as a significant component of the elevator business in the foreseeable future. The country has a vibrant elevator component sector and there is an increasing presence of international component companies.

Designing a market research study for the elevator industry is a complex affair. Involvement of many stake-holders across the value chain such as architects, builders, developers, consultants, elevator & component manufacturers, and Government agencies makes it challenging. Unlike many other industry sectors, the elevator industry in India is not well documented and reliable production or sales statistics pertaining to this industry are not available and hence, there is heavy reliance on primary research. The building and construction sector is highly fragmented with a vast number of developers and builders; further, tastes, preferences and historical practises vary from city to city. Thus, a sound marketing strategy needs reliable data based in-depth research study in the target cities.