In the current scenario, I am quite optimistic on the road sector mainly
To become a five trillion economy, India has to build its infrastructure; the government’s commitment to invest 1.4 trillion in the next five years on infrastructure building is a step in the same direction. No doubt, the last few months have been quite slow for the equipment sector, but we are sure that once the government pumps in money in the road sector, things will improve in a few months.
In the mining sector, there has been no major change since the last 4-5 months. In imports, there has been a slight increase in coal, but the quantity is not much. Developing the coal mines, which we have been allotted, will take time, but it will increase equipment consumption. In irrigation/canal lining, only Andhra Pradesh and Uttar Pradesh are seeing some activity, but in Maharashtra and Gujarat, no new projects have been announced.
So, in the current scenario, I am quite optimistic on the road sector mainly, and we are keeping our fingers crossed for the projects to take off. Many metro projects are coming up in B-class cities, so demand is set to rise. But, it’s a matter of how much funds the Government will release. At the same time, we will also be looking at industrial development.
LiuGong headquarters is putting a lot of investment into R&D and in the coming years many more new products will be launched in India.
Technologically advanced machines are the demand of the future. LiuGong headquarters is putting a lot of investment into R&D, and in the coming years many more new products will be launched in India. Recently, in Beijing, we showcased our new technology of remote-controlled machine operations and we did an operator-less demo of a loader operation which was 3000 km away from Beijing, using 5G network.
We have also launched electric excavators and loaders but introducing them in India will take some more time. We believe that global, high-tech machines will come to India, sooner or later. We have a wide range of products and will keep launching them in India as per market demand. As a service-driven company, we will have our infrastructure in place before launching a new product so that we can extend the required support to our buyers.
We have designed an engine specifically for construction equipment in technical tie up with Cummins.
There is a market trend for compact, lightweight, fuel efficient machines, and in accordance with this, LiuGong , since the last three years, has been majorly focusing on bringing fuel efficiency in its machines. To make machines lightweight, our R&D team is continuously working on better metallurgy. For machines to be fuel efficient, they should be made more lightweight and they should be fitted with a better engine for giving better performance. This is the reason why we have come up with an electrical segment of machines, which we will introduce in the coming years.
Two years back, we launched our new range of excavators and loaders which were fitted with our own engines. We have a tie-up with Cummins and together we designed an engine specifically for construction equipment. If you see, the engines being used in construction equipment are, more or less, the same as those being used in commercial vehicles. In commercial vehicles, for application work, you put the vehicle in the fourth or fifth gear and there is no load on the engine. But in construction equipment, the engines work on 80% load always, so, we need different engines. Our Quantum engines which we have developed along with Cummins are being used for the last three years in India because of which we are getting significant fuel efficiency, especially for our 5-ton wheel loaders as well as our 20 and 22-ton excavators.
Our software MyLiuGong tracks 15 operational features of our machines
Nowadays, almost all OEMs are incorporating software in their machines. We are using a software called MyLiuGong which captures all the data of the machine’s operations, fuel efficiency, periodic maintenance, monthly and weekly analysis, geofencing, idle and production time etc, which the machine owner and operator can capture any time on his mobile or computer. In fact, there are 15 operational features that they can track through MyLiuGong, which we have been using for the last three years.
As far as more advanced features like performance analysis is concerned, we can provide it to the customers as we did for our premium clients who opt to have it. This is a costly software and all customers would not be ready to pay for it. For example, for rental companies, especially, it is more important that the machine is working, how many hours it is working in a day, how much fuel it is consuming in a day, and the focus is not so much on its productivity.
We plan to start export of compactors and excavators from India.
We have started exporting to SAARC countries, namely, Nepal, Bhutan and Bangladesh, and have entered Thailand with our compactors, which we will also be supplying to Malaysia. Our compactors have been well accepted in all these markets as the BS 3 norms have not been implemented yet.
Getting loaders from China is cheaper than getting them from Indian manufacturers but as regards to backhoe loaders, excavators and compactors, India is the cheapest market in the world. So, we plan to start export of excavators and compactors from India to the neighboring countries.
LiuGong is ready with machines that comply with BS 1V norms.
BS 1V norms will be effective from October 2020 but we are already prepared with machines that comply with them. Now, we have to see how customers will respond to them. They will be fitted with electronic engines from China and also from India.
We have seeded our machines in every kind of application.
Right now, our only mission is seeding the machine in each and every pocket across the country. Our 8-ton to 50-ton excavators are working successfully since their launch. In fact, every class of excavators with long arm and short arm, for all kinds of applications from crushing, mining, and normal earthwork to construction etc, is working in India. You could say that we have seeded our machines in every kind of application.
There is demand in the market for mini 3-ton and 5 ton excavators, which we do not have in our portfolio right now. What we have is a Euro IV emission model which is much more costly. LiuGong China is planning to come up with a more cost-effective product, hopefully by next year. The market for the 7-ton class of excavators will also increase and we are gearing up for it. With BS 1V norms, the cost of wheel loaders will also increase.
We are ready to provide financing, leasing, refurbishment, and buyback options to our customers.
If B-class contractors are ready to give us some kind of bank guarantee, we are ready to give them flexible and a longer period of credit of six months or so. In rural areas where we are trying to promote our small loaders and excavators, we have tied up with a few corporative banks at the local level.
Customers are looking at buyback options which we are providing through our dealers.
Dealers will buy back the machines from the customers and we will refurbish them and sell them again in the local market. The fact is that customers are already financially stretched and do not want to add new machines to their fleet.