Palfinger bets on local production to boost India growth, cut costs

Palfinger is investing ₹350 crore in setting up a manufacturing facility in Pune, with production expected to begin by 2027.

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Palfinger AG, manufacturer of loader, boom and recycling cranes and other lifting equipment, is moving to localise manufacturing in India, betting that a 30 per cent reduction in costs through local production will substantially expand its market reach.The company has got into a comprehensive agreement with TVS Mobility Group, which has been distributing Palfinger cranes in India since it began selling here in 2007. The latter will now take on a significantly expanded role covering supply chain, dealership and aftermarket support.Andreas Klauser, chief executive of Palfinger AG, said the strategy is about building scale through partnership. “By combining strengths, we are expanding our footprint, improving parts availability and service responsiveness, and building a scalable platform for sustainable growth,” Klauser told ET.R Dinesh, director of TVS Mobility Group, said the expanded tie-up leverages the group’s integrated ecosystem to enable “faster go-to-market, operational efficiency and scalable lifecycle support” for Palfinger’s India expansion.

Palfinger is investing ₹350 crore in setting up a manufacturing facility in Pune, with production expected to begin by 2027. Initial capacity will exceed 1,000 cranes annually, alongside steel components destined for export to other Palfinger markets. The plant will employ around 200 people in its first phase. Klauser noted the move fulfils a commitment made to Prime Minister Narendra Modi during his visit to Austria last year.

The context is significant. India’s construction equipment market is currently valued at around $6 billion and is growing rapidly, driven by large-scale public investment in infrastructure, affordable housing, metro networks, national highways and defence, said Santosh Rao, senior vice president, APAC.

“Palfinger has grown at a 17 per cent CAGR over the past decade entirely through imports. We see localisation as the lever that unlocks meaningful volume growth across these segments,” he said declining to share absolute numbers.

The TVS Mobility partnership covers the full commercial lifecycle-supply chain, dealership, aftermarket and vehicle-on-demand operations-with the two companies also set to jointly explore defence sector opportunities.