Hikoki: Key Differentiator in Indian Power Tools Industry

Tomoaki Moro, MD Dattatraya Joshi, Executive Director & Secretary, and Takeo Tamagawa, Senior Director, Marketing & Communications Office, Strategic Management Division, discuss the company’s growth strategy for the Indian market.

How important is the Indian market in your growth plans?

India gives us an opportunity for growth, innovation, and contribution. There is a growing demand for quality and world-class tools which can enable India to compete globally. So, we are strengthening our business and customizing our offerings for the Indian market and its unique requirements. We are foreseeing growth opportunities shifting to Tier II and III cities, hence, we are looking to strengthen our base in this area and increase our market share. Overall, we are aiming to make India our growth engine for the coming years and our dynamic new partnership with KKR is further enabling us to accelerate this growth and pursue our goals more aggressively.

Hikoki

Please describe Hikoki India’s performance over the years.

Hikoki India has grown by 16% over the last 20 years and plans to scale up its dealer count from the current 600 to 1000 by 2020. The Indian power tools industry is estimated to be ₹4000 crore and growing at 7%. The growth tempo will continue due to demand coming from increased construction, notably in the housing and automobile sectors. However, there will be stiff competition from both premium and non-premium brands, but Hikoki will retain its strong position in the Indian market through product innovations, launch of advanced power tools, and by strengthening its customer relations.

What about your strategy to drive sales in India?

Hikoki is the second largest player in the power tools industry of India. It offers high performance products and services, and is backed by its head office in Bangalore, 13 branches, a large distributor network across the country, and 100 authorized service centers. So, we have a solid footprint in India. Our product development and sales has been driven by the continuous feedback that we take from customers, which drives us to innovate and bring out tools that are lightweight and durable, and which ensure precision, mobility, and reliability.

Hikoki sold 3,60,000 tools in 2017-18 and aims to increase sales to 4,00,000 during 2018-19. We are launching new technology Multi Volt tools and seeing a shift from corded to cordless tools, with AC brushless technology, we will introduce more user-friendly, cordless and DIY tools in the Indian market, which will also be more affordable. Four new product categories will supplement our present range of six categories with 200 different models in India. Moving forward, we will target end-users and resellers in a major way.

Hitachi Koki

Though India is a growing market, it remains price sensitive. This has been further compounded by appreciation of the dollar. To meet the price demand, we have set up a plant in Peenya, under the Make in India program, and have already increased production capacity by 50% in the last two years. We will increase the capacity further and hope to reduce imports from China and Japan by widening our product range as the market evolves.

How will you maintain a distinct product and technological identity in the Indian market?

Hitachi Koki acquired Metabo, a high-powered, precision power tool manufacturer in Europe, in 2016. These tools are for high-end applications, and we have been selling them since 2017 for a range of applications such as in precast buildings, for wood work and fabrication. With transfer of technology from Metabo, we will upgrade our technologies and develop more high-end products.

Hitachi Koki

We have plans to expand our manufacturing unit in Peenya as part of our initiative towards ‘Make in India’ and shift some of the facilities from China to India. Maruti Suzuki, Toyota, L&T, Tata Motors, Ashok Leyland, are among our clients and we have also sold our products to BHEL, BEML, Alstom, and Tata Steel.

NBM&CW December 2018

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