Tata Hitachi: "Our attempt and objective is to keep pace with market growth and consolidate our leadership. In the years when the construction equipment industry was facing a downturn, we invested in technology, research, product innovation and improvement, which has given us the confidence of catering to the new demand surge in the market," says Mr. Sandeep Singh, Managing Director, Tata Hitachi India in an interview with S.A.Faridi.
Seeing the government's focus on attaining 40km of road construction, and opening up of the mining and railways besides other infra sectors, how do you sum-up 2016 for the excavator market and what is the growth projection for Tata-Hitachi in 2017?
As you are aware, the performance of the Indian economy – specially the manufacturing sector – over the past three years has not been very encouraging. The recessionary pressure of 2012-13 had severely impacted the industrial activity in India.
However, the silver lining today is that the 12th Five Year Plan has brought back focus on the Infrastructure segment. As a result of this, India hopes to see robust economic development. The substantial infrastructure investment of $1 trillion in the infrastructure segment will, we believe, drive higher demand for construction equipment.
Coming to Tata Hitachi – as an organization, our focus is on our demand drivers in the market – Infrastructure and Mining. In infrastructure, there has been a spurt in roads and railways construction, leading to an increase in the demand for excavators. We are also seeing a significant demand from major and minor irrigation projects from some of the south Indian states. Projects such as the redesigned Pranahitha Chevella Irrigation Project, the Mission Kakatiya Project, and the Mission Bhaghiratha Project, are all contributing to an increased demand for excavators.
As far as the mining segment goes, in the long-term, the industry overview is positive. However, currently there is a degrowth, though, numerous projects have been announced by the Government.
Our attempt and objective is to keep pace with the market growth and consolidate our market leadership.
The market is maturing from basic equipment to more sophisticated machines; how is Tata-Hitachi bringing technical improvisations to its existing excavators?
We have a full range of construction and mining equipment. Most of our models are manufactured in India. Some are imported from the Hitachi network. Our consistent growth and success is built on the foundation of our ability to understand customer needs and provide them the necessary equipment and support solutions to increase their profitability and competitiveness – what we define as reliable solutions.
Our comprehensive range of equipment's include 2 to 40 ton hydraulic excavators for the Infrastructure sector, 45 to 120 tons for the mining sector, and the ultra large 190 to 800 ton excavators for specialized heavy duty mining.
These products, amongst others, are a part of our latest EX super series and the technologically advanced ZAXIS GI series. Products have been manufactured keeping in mind our customers. We understand that today, our customers realize that they need to be extremely competitive in the marketplace – and to be competitive, they need to reduce operating costs and improve efficiencies. Keeping this in mind, we have developed a two-pronged product strategy – one addressing the value segment and the other, the premium segment.
The value segment has products belonging to the EX Super Series –combining advanced technology and low running costs - to enable a high return on investment. The superior design of products in this series ensures ease in serviceability leading to a lesser downtime for maintenance. These EX Super Series machines work in a wide variety of applications in various geographies across India, commanding best-in-class resale value.
For the premium segment, we have launched the ZAXIS GI series of machines – fitted with industry leading hydraulic technology to ensure unbeatable performance, high fuel efficiency and high durability. The ZAXIS GI series of products provide impressive fuel economy, swift front movements and are easy to operate. Another highlight of this series is the optimized hydraulic system and the improved engine, which showcases Hitachi's technological prowess and expertise.
To sum-up, it is our customer centric approach, our commitment to continuous innovation in partnership with Hitachi that ensures that we are up to speed with the latest technology in terms of the machines and services we launch.
How are these newly launched products attuned to meet Indian job site requirements?
Our prime focus is to deliver reliable solutions to customers depending on their job site requirement. It is this focus that has guided us towards the launch of the new EX Super series of machines. A lineup which includes the tunnel version of EX200LC Super series, the aqua version of EX 70 Super Series - variants have evolved from a specific understanding of job site requirements.
The GI series of ZAXIS 370 LCH quarry variant and the ZAXIS 400 MTH for large granite and marble quarrying, are targeted at Granite & Marble, Blue metal handling and bulk excavation segments in India. They are powered by a reliable Japanese engine to deliver 250 PS power, and built to achieve higher production efficiency in tight job schedules.
A combination of Hitachi Construction Machinery Technology and Tata Hitachi Construction Machinery R&D has given us the required expertise to customize and build machines keeping in mind the job site and application requirements in India.
Apart from their main use, excavators are multi-purpose machines when used with attachments like breakers, bucket crushers, rock cutters, etc. How are you improvising your equipment for better integration of these attachments for optimum performance?
Being a customer-centric organization, we manufacture both standard machines and develop specific customized machines through a process of R&D. A wide variety of applications are addressed by offering unique and suitable attachments. We have tied up with specialized attachment vendors to meet the requirements of the market. We draw from the Hitachi Construction Machinery network pool of tried and tested vendors in building these attachments. Our Indian R&D and technical support teams work together with Hitachi Construction Machinery to establish and ascertain the compatibility of the attachments with the machines developed in India.
Are you planning to strengthen your existing dealership network?
We are in the business of providing reliable solutions for building a greater tomorrow. We would like to be a preferred partner for customers in the infrastructure and mining sector. In this process, we would like to develop and strengthen our relationship with vendors and dealers.
We prioritize our outreach to customers through a strong distribution network that aids in the servicing and selling of products. Our vast network includes a marketing head office, regional offices, branch offices and dealerships spread across the length and breadth of the country. Our dealers are our extended arms – our face to our customers.
We are continuously studying market requirements and opportunities and setting-up / fine tuning our dealership network in our effort to be in proximity with our customers.
Apart from expanding your sales through first time buyers, what would be your strategy to retain your existing customers? Is there any new strategy being worked out to offer value added sales viz parts support, product support, better customer services, etc?
Our comprehensive range of support solutions such as Full Maintenance Contracts, Annual Maintenance Contracts, Extended Warranty, maximize the returns of the customer's investment by optimizing equipment utilization. It also helps strengthen our relationship through the customer life cycle experience. For our mining customers, we have introduced Full Maintenance contracts through which our customers can avail complete on–site management of machinery: our service engineers are placed on-site, we store spare parts on-site and provide them with a fully equipped workshop to address all their requirements.
The company offers a wide range of parts for our machines, both new and older models.
We ensure high levels of availability of a wide range of genuine spare parts at competitive prices to keep our machinery maintained and operating at the original specifications. Our central warehouse, located in Nagpur, has 1,30,000 sq.ft of warehousing area. More than 30,000 line items of spare parts are stocked at this central warehouse. Strategically located in the central part of the country, this warehouse is well connected with rail, road, and air transport, so that the parts can reach customers in the shortest possible time. We have also started a new warehouse in Dharwad, with a state- of-the-art technology, to cater to the southern dealers/ customers faster.
As part of our customer service offering, we have strengthened our service capabilities by offering IT- enabled solutions to our customers. Our machines are popular among the Indian customers for their high output and low fuel running costs. As market leaders, we believe that it is our responsibility to introduce new technologies. Therefore, we launched ConSite: a next-generation service solution that utilizes Information Communication Technology (ICT), to deliver monthly reports to customers. Providing both summary reports that give an overview of the operation of all the fleet owner's machines and detailed reports that show information about individual machines. Customer education programs are conducted to help them infer the data and take necessary initiatives to improve site efficiency, and thereby, profitability.
In addition to this, we have introduced a remote fleet management system with our global e–service offering. This allows the customer easy access to onsite machines, helping him access operating information real time to increase machine productivity and reduce downtime. This is a convenient and simple system, designed to give customers valuable information regarding the operations, maintenance, system parameters and alarms of their machines from the convenience of their offices. The advantage of this system is that it can be configured to give them a customized dashboard of the vital parameters that they would like to monitor, to increase productivity and reduce the downtown of their fleet. This data and logs are then sent to our servers for processing and then to customers and dealers around the world. This system is available 24 hours a day, all the year round and can be viewed on laptops and mobile devices through the internet.
Over and above the technology-enabled solutions that we offer, we have set up Skill Development Centers and Operator Training Schools at Kharagpur and Dharwad. Way before the current Government focused on the Skill India initiative, we had set up skill development centers to provide hands–on training for new recruits and refresher courses for our factory and service personnel to sharpen their skill sets and keep them abreast of the latest technologies. Also, as part of the company's CSR activity, the operator training school at Kharagpur imparts driving and servicing skills for excavators and backhoe loaders to the unemployed youth to enhance their employability as operators for construction equipment both in India and abroad. These initiatives are in keeping with the spirit of Kaizen (continuous improvement) which the organization firmly believes in.
Where do you see the CE market in the next 5 years?
In an overview of the Indian construction equipment sector, ICEMA has stated that India's infrastructure sector is poised to grow significantly with the increasing demand for development of key infrastructure projects such as roads and highways, rural connectivity, urban infrastructure including metro rail projects, ports and airports, industrial corridors, smart city projects, etc. The Government has initiated various steps for accelerating infrastructure development and is focusing on putting India back on a growth trajectory after a period of declining GDP growth rate. Investment and implementation of key projects along with corrective measures and industry-friendly policies of the Government we believe, will greatly help the infrastructure development in our country.
Several critical projects have been announced in the last year which are opening up new avenues for the construction machinery industry. Among these are the 'Make in India 'initiative - aimed at taking the share of manufacturing to 25 per cent of GDP and creating jobs to cater to the large number of youth entering the workforce – the 100 Smart City project for creating world-class new urban agglomerations to absorb rising city population, the Clean Ganga initiative for spreading intelligent water management, and upgrading cities alongside the major rivers of India.
All these projects will lead to a surge in demand for earthmoving and construction equipment. In the years when the construction equipment industry was facing a downturn, we invested in technology, research and product innovation and improvement which has given us the confidence of catering to the new demand surge the market is currently seeing. Our factories at Jamshedpur, Kharagpur, and Dharwad are well equipped to produce both standard machines and customized machines and attachments-basis the project and job site needs – to address the market and customer needs.