How do you view the Indian construction equipment market and where you place Sany in the current demand scenario here?
It is now crystal clear that with vibrant economy and huge business potentials, India is an emerging market and to add to the momentum, the government has given top priority to infrastructure spending. Based on the current government's policy, the Indian construction equipment market which includes earthmoving, mining and concrete equipment will grow with an average rate of about 20% for all companies engaged in the segment for the next five years.
Other products like crawler cranes, I think have price factor in the reckoning but eventually the market logic will prevail. I believe people will take some time to understand the difference between better qualities even among the Chinese products.
Which area do you think would witness the huge demand of concrete pumps?
Concrete pumps demand as you would see is on the growth track not only in the metropolitan cities but also in tier II cities which are coming up fast across the country with high-rise buildings. We are not only targeting the high-rise buildings but also those which are coming up in small cities like Nasik, Pune, Coimbatore etc in the next three to four years as well as in Infrastructure.
As numbers of Chinese companies are coming into the segment, how do you see the competition at the domestic as well as international levels?
I think the localization is the main element to bring the cost down. Are you attempting some sort of localization of your product and what would be the level of localization?
Yes, we are doing exactly the same; for us, localization is an ongoing process. It varies from product to product . Our maximum localization is now for the concrete pump and in view of transit mixer, it would be close to 60% with local chassis but some of the critical component are sourced from China.
What sort of challenges Sany and other equipment industry are currently facing?
Currently, there are scores of pressing challenges that equipment industry is facing as there are still people around who have to understand the difference between the brands. Terex is different, Liebherr is different, Volvo is different so are the Sany and other Chinese companies. I think for US and Europe products, they have accepted the difference. But for Chinese one, they consider that everybody is at the same level and the difference between ours and other Chinese products which are competing with us is yet to be understood and that is the biggest challenge we are currently facing.
The second challenge is acute shortage of skills for operating and maintaining these machines. We have machines but don't have the right type of people to operate them. The problem has become more complex because machines are becoming more intelligent. The hydraulics are sensor controlled and systems are computer controlled. But you must have good people to maintain and operate those machines so that is the area needed to be addressed as huge skill gap is there. Although industry talks so much about trying to bridge the gap but to date the apex training bodies in the country have not yet come out with a solid solution to train the people and that is the area that needs more attention.
Supply chain management and the vendors' availability is another major challenge for every player to face in the market. Double taxation structure is also a big problem. The GST is in the pipeline that will make even the economy to grow at much faster rate as infrastructure grows much faster.
What types of models are you currently promoting for the Indian customers?
Our major and lead products are concrete pump and crawler cranes and in both we have done exceedingly well.
What's response time you are adhering to, is it 36 or 24 hours?
40C concrete pump that we are manufacturing in India our standard is that our dealer will attend the complaint within 24 hours whereas our target in China is 12 hours. To meet the requirement of our Indian customers that machine should be back in working position as soon as possible, we are working very hard to attend a call within 24 hours.
What is your plan to launch excavators in India?
In regard to excavators, we are just starting and have displayed the excavator in the recently concluded bC India. We would be launching it in India very shortly.
What's the selling target or where will you source the machine from?
We will be priced competitive with latest generation machines offered in Indian market . In the beginning, it will be imported but we will manufacture it locally in the long run.