How do you look at emerging CE market in India and how are you placed in this evolving scenario? Or how do you see the market for your products in India?
No other region of the world can match the growth opportunities that Asia presents for Caterpillar and its dealers. In particular, the aggressive plans for infrastructure development in India represent a tremendous opportunity to serve existing and new customers. For mining, Asia also represents opportunities to support long-term mining industry customers who are investing in their operations to support the growing demand for natural resources. This includes mature mining operations in South-East Asia and Australia as well growing new mining operations in India where significant coal reserves and other deposits remain untapped.
For the general construction market in India, the Backhoe Loader dominates the machinery industry and is valued for its versatility and mobility. However, increasingly India is employing the concept of the “right tool for the right job.” In this context, Caterpillar dealers are in an excellent position to provide sound advice. Completing a value analysis and selecting from a range of world class Cat® construction equipment and work tools enable customers to increase productivity and improve safety of workers.
Foreseeing good demand in 2011—are you planning to expand your manufacturing facility and what are your plans to manufacture excavators in India.
Caterpillar is committed to achieve market leadership in India for which we will continue to explore and develop products that will meet the Indian market requirements and leverage regional and global product strategies to allow synergies with this country.
As part of the strategic plan to increase our manufacturing footprint in the rapidly growing Asia-Pacific region, Caterpillar Inc. (NYSE: CAT) announced in June 2008, a four-year, $200 million investment to increase manufacturing capacity in India. Caterpillar is investing in increasing production of the off highway trucks (OHT) made at its Thiruvallur facility near Chennai. These 60 tonne and 100 tonne trucks are used in coal and other mining applications in India. Besides this investment, the company is building a dedicated facility to assemble backhoe loaders.
The company has also invested in component manufacturing. First, we expanded engine production at its facility in Hosur by adding production of the Caterpillar 3508 engine and then we launched production of Turner transmissions here.
How do you view the competition in this sector from domestic and international players? What differentiates you from competition?
The Indian market offers significant opportunity. Caterpillar manufactures world-class products that deliver the lowest owning and operating costs. Our primary differentiators include product reliability and durability, technology, low life cycle cost, and tailor-made solutions to specific customer requirements. Our focus is to make our customers business more profitable.
We are most excited by the Connected Worksite (CW) solutions we announced last year. It is Caterpillar's mix of technologies, products, solutions and dealer support that helps a contractor achieve higher productivity, better equipment availability, lower operating costs, enhanced safety and a lower carbon footprint. This CW gathers appropriate and updated information about the location, status and performance of the equipment. It delivers the equipment where ever and when ever required to help the contractor to make concrete decisions about the management of his fleet and his entire business. CW can also provide automated control and guidance for some of the equipment and in fact it extends beyond the job site itself. It connects the contractor's equipment, business offices and Cat Dealers to create a scalable, customized integrated network that helps make all operations more efficient and productive.
Our experience shows that the customers can achieve up to 40% improvement in efficiency in major earthmoving projects.
Few OEM's are planning to have remanufacturing facility in India and Cat have such facility in several other countries—are you also planning to set up such facility in India?
We currently have a license to import remanufactured products to India. This is the first step in educating and making the consumer aware of the benefits of remanufactured products. It also serves as an opportunity to collect basic raw material without which the remanufacturing process is not possible. However, we are still in the process of identifying the most suitable plan to initiate remanufacturing activities in the country.
The Indian government needs to take the lead to establish a domestic industry policy for the country. Other countries in Asia are moving quickly in this space and, without the effective action, India runs the risk of being left behind from a growing opportunity in a green industry.
Keeping apart 100-150 top contractors, there are thousands of contractors who are using or upgrading their equipment, these contractors are quite price conscious and buy from other manufacturers, to tap these medium size contractors—what marketing strategies you are adopting to overcome of this mindset and convince them to go for quality?
Indian customers are shifting priority from initial price to life cycle costs. With large investments currently being made in the infrastructure sector, the customer is keen today to complete the job quickly and efficiently to avail more opportunities.
Caterpillar focuses on partnering with the customer, through dealers, to help them understand the options available, and the capability of the machines. What we offer are integrated solutions, right from the kind of purchase that is possible [outright buy, finance option or rental] to the support services needed. Furthermore, technology additions such as machine control and guidance system has clearly demonstrated greater productivity and increased the efficiency of the customer.
Please tell us about after sales services and spare parts availability.
We have 8 territorial dealerships across the country owned by GMMCO and TIPL with more than 168 dealer outlets at the moment. These territorial dealerships ensure greater focus and better coverage within each of their territories for sales (prime products and parts) and service support. They have the necessary ability to provide support to a broad base of our customers including construction, mining, and energy. Every territory has workshops, parts depots, area/resident offices that ensure the customers needs are fulfilled. GMMCO and TIPL have also invested significantly in world class rebuild centers where customers can obtain international standard support thus enabling them to maximize the life cycle value of their Caterpillar equipment. Our dealers are investing more than $65 million in the next few years to double their number of outlets and manpower.
A word about CAT's training program.
Caterpillar is committed to meet the training needs of customers. Along with GMMCO and TIPL's certified demonstrator operators, Caterpillar works closely with our customers in assisting them train their operators. There are a variety of customized training programs available i.e. machine application & performance, site supervisor training etc. Safety.Cat.Com is another initiative that Caterpillar continues to promote. This is a free web-based site that offers segment specific safety training needs, toolbox talks guidelines, easy to check use checklists, videos etc that ensure that the support is available for our customer's primary priority.
