Escorts: Making the Right Moves

Rajinder Raina, GM - Marketing, Escorts Construction Equipments (ECE)

Mr. Rajinder Raina, General Manager-Marketing, Escorts Construction Equipments (ECE), shares his thoughts on the current market dynamics

Toughest phase is over and industry will see growth for the next 3-4 years

Demonetization and GST have been two transformational decisions taken within 9 months of each other. When something of this magnitude is undertaken that changes the way we do business, the impact is bound to be there. In our industry, it took the hiring segment (in particular) a little while to come to terms with the new rules of the game.

Demonetization came at a time when the industry was on an upswing, resulting in a slowdown for about six months. However, things are certainly getting better, which is corroborated by the post-monsoon growth in volumes.

As for GST, the major problem has been its implementation by the OEMs and its comprehension by CE owners and end-users. For small-time/retail hirers, it is a bit of a struggle as they are used to systems and record keeping. With every passing month, they see the merit in Input Tax Credit and uniform taxation without the botheration of C-forms etc. Inter-state movement of migrating machinery is hassle free and time-saving as well.

The issue of emission norms was more of a bureaucratic management issue for which iCEMA members put in a concerted effort to get the clarification in place to ensure that our equipment did not fall into this domain. I think the toughest phase is over and hereafter the industry will see growth for the next three to four years.

Escorts did very well in Q2, resulting in exceeding the targets for H1. The outlook for H2 is promising.

Forging a connect with end-user and owner is our focus

We at Escorts have invested big time in the past two years in external communication to the market place. Brand building is part of our corporate message that we are a part of the National Aspiration of Infrastructure leading the way for a developing India. We are visible on print and electronic media in a planned manner. Brand promotion through movies, display at major airports and railway stations has been pretty aggressive. However, the connect with the end-user and the owner remains the focus for adding to the brand equity – the power of personal touch is paramount.

The cost of work done by an equipment per unit time is the best measure

Total cost of the ownership is an aspect of the production machines that can never be over emphasized. The cost of work done by an equipment per unit time is the best measure. The time span for measuring this cost is generally 36 to 48 months. The owning + operating and maintenance cost is tangible and can be calculated to the last rupee. However, the machine availability (reliability/MTBF) should not be lost sight of. Fuel consumption, productivity, cost of maintenance is the USP that we keep working upon.

As for MTBF (mean time between failures) the dealership outlets, 2S in particular, have been added to the system. It has gone up to 125 outlets across India, with parts and skill sets available for preventive and breakdown maintenance to ensure minimum TAT.

Scope for exports is huge

As for the industry as a whole,the scope for exports is huge provided we upgrade our products to global standards. Engine emission norms is a no compromise area that OEMs in India need to take up on priority. The other is safety. Provision for fool-proofing and operator safety and comfort needs to go up substantially as some of the Indian equipment manufacturers have not invested much on these aspects. R&D investments for getting them in place will beget quick results.

We need to choose the right markets and ensure horses for courses is the guiding principal. At Escorts, we are working towards adding 20% to our volumes through exports, so, investments and efforts for the same are in place.