HHI–Passionately Focused on Indian Construction Equipment Market

Hyundai Heavy Industries (HHI)
"We are highly focused and passionate about Indian construction equipment market. We will endeavor to make our strong presence felt amongst Indian customers. In line with our global vision, we aspire to become market leader in Hydraulic Excavator in India also. Our new factory coming up near Pune is shaping up well as per our plan and moving fast towards completion and we will roll out our first India made Excavator by Mid 2008. We will be offering the full products range to Indian customers," says Mr. Jong Sik Kim, Managing Director, Hyundai Heavy Industries in his Interview with SKK and S. A. Faridi.

Tell us something about Hyundai Heavy Industries (HHI) international operations, its important business areas with particular reference to construction equipment segment, company’s manufacturing facilities in different countries and its product range.
HHI is a 20,000 million US$ global organization with high focus one engineering product like ship building, construction equipment, engine & machinery etc. It started its ground breaking of shipyard construction in 1972 and today it is recognized as a market leader across the globe. Over a period of time HHI has diversified in related field like offshore & engineering, engine & machinery, construction equipment, electro & electric system and industrial plant. The success on each field is manifested by high stock value and HHI is considered as a preferred employer in South Korea with high employee satisfaction which in turn ensures customer’s satisfaction and social commitment.

Hyundai Construction Equipment Division started its journey in 1985 and within a short period Hyundai brand in Hydraulic Excavator has captured the major mind share of customers and various associates across the world. It has captured 7% market in the world for Excavator within 20 years of operation and countries like China which is considered as one of the biggest markets of Excavator. Hyundai is recognized as a topmost brand in this field. The wide acceptability of Hyundai brand is an expression of customer’s confidence on Hyundai's reliability, quality and after sales support to its customers and this is in congruence with the management vision to place this division amongst top five manufacturers in construction equipment by 2012.

Hyundai Construction Equipment Division produces the entire range of Excavators starting from 2T to 80T. In addition to this, it manufactures various capacity wheel loader, skid steer loader and Industrial forklift. As I mentioned earlier that Hyundai is having a long term vision to this business portfolio which is evident from its plan to diversify its product range to become a total solution.

What prompted Hyundai Heavy Industries to make its entry into Indian Construction Equipment sector? What challenges it poses to a new entrant like Hyundai to market its product and services in the present competitive construction equipment business environment?
India is a very potential country with respect to construction equipment and mining. The growth in the sector is 30%+ and contributing a major part in country’s GDP growth. The excavator is main equipment with respect to infrastructure and mining where machine with advance technology, backed up by quality support and competitive spares parts pricing make a project success. Hyundai construction equipment having superior features will offer value added service through its countrywide distribution network will certainly set a “new standard” in the industry.

Indian customers are becoming not only technology sensitive but also they want the best product at a very competitive price. Hence we will have to provide world–class equipment at an affordable price for mass segment. Meeting this requirement will be the biggest challenge for us in India in ensuing days.

How Hyundai’s new factory at Chakan, Pune is shaping up? What would be its products range and by what time its products would roll out into Indian construction equipment market? Will the new facility be an assembly line operation, through imported products or Actual manufacturing operation? What are the further plans to set up more factories in India, using the same as export Hubs, apart from meeting the domestic requirement?
Hyundai construction Equipment India has invested approximately Rs. 300 crores behind setting up a plant in Pune, Maharashtra and will roll out its first India make Excavator by mid 2008. Hyundai aspires to be the market leader in Hydraulic Excavator in India and as such looking for fast growth track of its operation. The factory is shaping up as per our plan and moving fast towards completion.

We will be offering the full products range to Indian customers. We will build advance 20T machine in Pune, India which will cater to the mass market. However, to cater to the need of high end customers of niche demand we will import high end excavators to India. In fact, we have launched globally 80T excavator to assist our customers to “excavate more at a time with lesser cost.”

What market share your company is looking for the next 2/3 years through your operations in India?
We are highly focused and passionate about Indian construction equipment market. We will endeavor to make our strong presence felt amongst Indian customers. In line with our global vision, we aspire to become market leader in Hydraulic Excavator in India also. However, we can assure you that we will do everything possible to take a sizable pie of Indian excavator industry in next 2/3 years.

India is a vast market for construction Equipment of heterogeneous nature and applications, how your company plans to have an efficient network of dealers, distributors, after sales services support system to render your client comprehensive services?
We will establish country wide multi dealers who are willing to grow with us and serve customers with passion and with a long term commitment. The dealers will be first interface for our customers and we at regional level as well as Pune level will provide all active support in terms of sales and marketing, spares, service, training etc to dealer to enable him to offer the desired delight to our clientele. We will leave no stone unturned to maximize customer’s satisfaction through our dealer to realize our vision.

We will have 3 tier support system with respect to parts and service. The dealer warehouse will be first level support system which will be assisted by Hyundai owned regional parts distribution system and it will be further supported by Hyundai Pune.

HHI reputation over the years has been wedded to technology advancement, commitment to research and development, training and reliable quality assurance system. What are various systems placed in the company under these heads and how these are proposed to be integrated in your Indian operation?
Hyundai believes that technology can realize the future we are dreaming of. HHI incorporates an efficient mixture of people and technology to meet the needs of global leader. The CE division of HHI has been widely recognized as an industrial leader for its use of advanced ergonomic engineering and technology. This is backed by highly advanced factory automation, zero tolerance quality control inspection system, and innovative engineering while offering a wide range of equipment like excavators, wheel loader etc. This strategy will be articulated in Indian context also as today’s Indian customers are more conscious towards technologically advanced product with world–class quality control system.

Hyundai also believes that Research and Development is an essential requirement for the improvement and advancement of modern technology. Hyundai’s commitment to R&D has been a motivating factor in the company’s many technical achievements and will be vital in its advance into 21st century. HHI operates four renowned in-house research institutes: This speaks the company’s high focus on R&D which will always keep abreast with latest product development with respect to customer’s need. We will articulate our R&D experience and integrate with Indian R&D talent which will enable us to produce product with desired India specific features as well as product with features required for overseas market. We are opening a wing of R&D in Indian operation also which speaks our commitment towards R&D against Indian context.

Hyundai’s policy is to actively meet all contract specifications and regulations, in addition to satisfying the needs of every client. HHI’s quality assurance systems are designed, organized and implemented to ensure HHI’s strict standards for quality. These systems are acknowledged worldwide by scores of national and international designing and manufacturing organizations. All of HHI’s divisions have received ISO9001 Quality Management System Certificates. Hyundai’s well developed resources for training enable HHI to continue providing its clients with high quality, reliable products and better services. Hyundai Construction Equipment India will also follow the same and integrate its operation with its global quality policy and will be awarded necessary certification.

Hyundai has established its credentials very well in India, first through its cars and now through construction equipment facilities in the country. What is next on radar–entering into other areas, particularly power generation and power equipment manufacturing sector, where there is a worldwide interest for market pie in India’s emerging power generation and power equipment manufacturing sector?
We are very hopeful about brand India and its future. That’s why Hyundai Motors had a successful venture in India and now it is time for its construction equipment division to create another success story. You are correct that power generation and power equipment will be another attractive area for investment however we would like to watch this market more in this part of the world and then decide about our strategy. But as we are venturing in India with construction equipment any kind of further entry with other business portfolio will be easier for us and we will have edge over others to serve our customers of India.
NBM&CW March 2008
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