Terex Focuses on Delivering Reliable Products
Ever since Terex Equipment entered into Indian CE sector, the company has remained bullish about its CE business in the country. How did the company arrive to its hindsight? How has been the business performance of the company last year?
Terex has nearly sold 7,000 backhoes in the country so far, which are serving some of the best known organizations in building, construction and mining industries. Terex products are acknowledged to be highly productive and reliable, and the company has earned a reputation of working closely with its customers. The company has 55 committed dealers across the country and in neighboring countries. Terex dealers sell, service and provide parts round-the-clock through a work force of over 600 trained engineers and technicians. Terex is focused on its mission of delivering products that are reliable and cost-effective and producing equipment that improve its customers' return on invested capital.
Making affordable products available for customers with value propositions while calculating to enhance market share, is also a challenging job for existing acclaimed brands facing rising production costs. Terex Equipment is computing to raise its share in backhoe loaders business from 4% to 6% during 2012.
Terex is an important player in Backhoe Loader segment, how is market evolving vis-a-vis the total market at the industry level? Is the company firm on its plan to revamp its manufacturing capacity or the company would hold it for a while in order to populate its market taking advantage of its advanced technical features?
Terex has used a unique innovative process to develop insight and understand better the needs and preferences of the Indian customers and the end users of our products. Apart from existing product portfolio, our new products - TL 210 Wheel Loader and PT 200 Site Dumper will go a long way in setting the benchmark for operational efficiency and low cost of maintenance. Our new products are going to enhance our reach in Indian market and help us in offering end-to-end solutions to the end users.
What has been the market response to the wheeled loader launched last year? What are the technological attributes and USP of the same?
TL 210, equipped with 160 hp BS III Cummins engine, is absolute and powerful loading equipment that offers wide range of loading functions in varied loading applications based on user industry requirements. The best stability and great lifting power are provided by its transversely installed engine. The unique Terex® SP kinematics provide for powerful operation in all bucket positions. The TL210 is an extremely cost-effective wheel loader.
As the minimum downtime is the key differentiator; what are the important things after market services, maintenance services and spare parts facilities available to maximize up-time of the your equipments?
Since the start of Indian operations in 2005, Terex Equipment has been relentlessly working towards providing advance technologies at customer's door step and that too at an affordable price, coupled with world class After Sale Support. We are allocating a good portion of resources in developing "Value for money" products for our customers. Our strong distribution network is instrumental in providing round-the- clock After Sale Support. As a result, we are building a strong platform of satisfied customers, who swear by Terex as their true and trustworthy partner. At the same time, we are ensuring that all our employees have undergone rigorous training sessions on product knowhow, organizational behaviour and customer support.
Do you think that CE companies need to tweak their business models in terms of more proactive brand marketing, redefine their distribution setup and fine-tune their operations so as to remain relevant in the present market environment facing a slowdown spell?
With growing competition in the CE, we will be strongly counting on rugged and reliable products to mark our presence, with fuel efficiency being in constant focus. As an ongoing marketing exercise, we are making our Dealers aware of new projects with adequate thrust on territory coverage and new demand areas which will enable them to position the equipment accordingly for the customers. Besides, we are also carrying out regular promotional activities for our backhoe loaders highlighting their productivity standards, while having regular interactions with our customers." Importantly, he finds newer application of backhoe loaders in agricultural sector, brick kiln industry, rural markets among others. For our new market expansion, the Dealer's selection in accordance with our set standards will be much in focus, where we will evaluate eligibility criteria in order to provide requisite products support and they will also be trained by us. With forecasted spurt in demand for our products, we are making our distribution network strong by adding new branches to existing dealerships and appointing new dealers at strategic locations.
Industry insiders pointed out that CE market would keep facing survival pressure for sometime more; what's your take on this and measures that will be taken at Terex end to sustain growth? Also tell us what are company's marketing & increasing foothold pan India plans seeing government's strong commitment for the twelfth five years infrastructure development?
Overall Infrastructure development is a key building block of Indian economic growth story. Apart from China, India is the only shining star among developed and developing economies, where the scale of investment in infrastructure development has been rising steadily. We firmly believe that this growth bandwagon will continue its march in coming times. As far as CE demand is concerned, we estimate that it will grow at a decent pace of 10-15% for next 2-3 years. However, the product wise share in the total industry might change as there is increasing shift towards high capacity machinery like excavators and wheel loaders.
With the kind of investment being planned for Indian infrastructure development and the potential lying ahead, the competition is bound to increase with the arrival of new players like Mahindra and Ashok Leyland-John Deere along with some Chinese companies. However, we see enhanced competition as an opportunity for us to work harder in improving our offering to our customers. Our R&D cell is continuously striving to design new add-ons for our existing products and we are quite confident about the relevance of these new features to our customers. We are working hard to ramp up our distribution network and bring it to world class level in terms of after sale support to our esteemed customers. We have added new products like world renowned Terex Wheel Loader, Mini-Dumper, Soil Compactor etc. in our portfolio.
The growth of the mini excavator market was successfully blocked by backhoes initially. Do you think that the projected growth in the mini excavator market will impact the backhoe market?
We don't think that the projected growth in case of mini-excavators is going to impact the sales of backhoe loaders in India. This is mainly because of the fact that backhoe loader is a versatile machine and can be used for numerous applications in the field of earthmoving. Recently, there is higher awareness about the utility of this machine in rural markets and more farmer cum entrepreneurs are coming up to own these machines.
A word about your company's financing and leasing facilities to assist customers acquire TEPL products.
Our finance arm, Terex Financial Services, is helping us in providing prompt financial solutions to our customers. Over the last 2 years, TFS has been instrumental in forging exclusive tie-ups with leading financial institutions in India like HDFC Bank, Tata Capital and many more. Due to these arrangements, we have been able to address the long-term demand of our customers. As a result, our machine sales have got benefitted, especially in those regions where our customers found it difficult to get a quick finance support in earlier times.
In Indian market scenario, what propels the market—CE price, quality, and brand or value additions?
Indian customer is very conscious about the output he gets for spending every penny from his pocket. But there is a continuous shift of preference from machine's buying price to reliability and performance. This is why, we are trying our best to offer a performance oriented product with acceptable quality and that too at an affordable price. We can proudly say that Terex, as a brand, is now considered as a provider of value for money products which deliver reliability and high performance output.
NBM&CW February 2013
