India is a key market for CNH Industrial

India, being an important strategic market for CNH Industrial will see investments in lower horsepower products in the next five years; it also plans to launch crawler excavators in the country.

Hubertus Mühlhäuser, CEO - CNH Industrial
“India is a very important market for us and we’re planning more investment here, especially in the lower horsepower products. We are also planning to make India our manufacturing hub for the Asian and African markets. In 2020, we will launch the ‘Crawler Excavator’ in the country and will begin local production in the second quarter.”

Hubertus Mühlhäuser, CEO - CNH Industrial
For the CNH Industrial construction segment, the strategic thrust is to develop a focused leadership position. The key priorities driving the strategy are continued delivery of the turnaround, earning the right to grow in products and markets, and to better leverage channel synergies with its agricultural business.

According to Mühlhäuser, “Once the CE business begins to show a sustainable track record of margin improvement, we intend to pursue opportunistic M&A. With our new strategic plan, we will achieve a 7% CAGR of net sales, arguably from a low base today, and with tailwind from our high growth markets in India and South America. We also see a 570 bps margin improvement to 9%, while our return on assts will improve to 24%.”

He informed that the company will invest a total of 1.2 billion in the construction segment, excluding the investment made by its supply partners. “India is a very important market for us and we’re planning more investment here, especially in the lower horsepower products. Despite the current slow economic growth, our focus is on the Indian market as we see more potential in sub 100 horsepower products there. We are planning to make India our manufacturing hub for Asia and African markets. Next year, we will be launching a new product - the ‘Crawler Excavator’ in the country and will begin local production during the second quarter of 2020,” said Mühlhäuser.

CNH Industrial Capital Markets

CNH Industrial has three manufacturing units in India, one for its construction equipment brand ‘CASE’ and the two for its ‘New Holland’ brand of tractors and CASE IH harvesters. In the Indian market, the company is number one in terms of sales in the ‘Compactor’ segment and number two in the ‘Backhoe loader’ segment.

CNH Industrial’s powertrain segment is a leader in alternative propulsion, and the company plans to increase its portfolio with focused investment in the revolutionary diesel technology, electrification, and in fuel cell technologies, allowing it to continue to drive non-captive sales growth. All of this will result in a 5% net sales CAGR, adjusted EBIT growth of 110 bps, and better RoI on assets to 32% with an overall investment of US$1.9 billion. Moreover, the company will provide customer-centric financial solutions to support all its business segments. These will include launching new products, entering new markets, and taking full advantage of the digitalization of its industries, all of which will lead to a portfolio of 4% and a net income CAGR of 3%.

For its agriculture segment, the company aims to double its market share in India by 2024, with increased mechanization. It has one tractor manufacturing plant in Greater Noida, and a plant for manufacturing harvesters in Pune.

On global trade war, the CEO said, “Global growth is going to stop if trade war continues. We are expecting to find the solution soon for this, which will help to improve our growth significantly in the global markets”.

NBM&CW October 2019

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