Volvo Outlines Growth Plans for India
Welcome to you for having first interaction with NBM&CW's readers after taking over the reins of Volvo CE. What innovative business agenda have you set for the company taking it to its next level of performance?
My priority is to enable Volvo to bring right innovations and solutions to all our customers in a much shorter timeframe. With these changes, we become more responsive to customer feedback, and can leverage collaboration and synergies across our organization more effectively.
My role is to create a rapid acceleration in the adoption of business practices and content that has proven to be assets to our customers as well as to our own operations.
With a maturing and expanding distribution base and products and services that are increasingly appropriate to the unique requirements of the country, we are confident that Volvo – which already has an excellent brand reputation, will build a commanding presence in this most exciting country.
What have been the key factors within the business environment and within internal environment that have been enabling the company to have a seamless market image during recession and post recession period?
In India, Volvo CE has over 13 year old history in developing and manufacturing of state-of-the-art construction equipment. Since 1997, Volvo CE's operations in India have grown significantly.
Over the years, Volvo Construction Equipment innovations such as drastically reduced service requirements on Articulated Haulers, torque parallel linkage, an electronic monitoring system for wheel loaders and the Care Cab, have given the company a distinct competitive advantage. Productivity and economy, reliability, quality, operator comfort and safety, service life and serviceability are aspects that Volvo Construction Equipment emphasizes in the design of its machines.
Volvo Construction Equipment in India got its first production footprint in India after the company's acquisition of Ingersoll Rand's road machinery division in 2008. The facility at Peenya in Bangalore manufactures road machinery to cater primarily to the Indian market and also for some exports. In May 2010, as part of the Volvo's objective of supporting customers in the growing BRIC (Brazil, Russia, India & China) markets, Volvo Construction Equipment announced a strategic investment of about INR 90 crores in Indian facility for the production of Excavators.
We recently announced the launch of Volvo REMAN, the facility that allows users of Volvo construction equipment to have their used components renovated at a lower cost than buying new ones and consuming far less new materials and energy.
What is the potential of Volvo dealer level rental franchise, Volvo Rental, to grow as the concept of rental takes holds in the country? What are the problems in the way of promotion?
We have been operating Volvo Rents in India which gives one more solution to customer. We expect this market to grow as more mechanization is happening in India. We do not see any major challenge in terms of Rental business. We are offering services in any part of the country for rental machines.
Where do you see Indian construction equipment market heading for in the next 2-3 years with or without Government projects propelling demand? What type of competition Volvo foresees in times to come and its considered strategies to take it on, including plans to introduce newer equipment meeting new infrastructure requirements?
India is now one of the most exciting and largest world economies with the long-term potential to overtake China in terms of growth rate. Volvo CE is committed to helping this dynamic society reach its true potential and play an active part in developing its infrastructure network. We have in the past – and continue to – invest heavily in the Indian economy, expanding our distribution and production base in the country. We are also increasingly tailoring our product range to suit the needs of Indian contractors and operators.
We have a well thought out strategy that will carry us into 2012 and are currently in the execution phase of that roll out. Customers in India should be confident that Volvo CE will bring to a wider-than-ever-before audience of customers more products and services that are attuned to the needs of contractors in India. An important part of our strategy is focused on growing our presence in this most exciting of countries, and thanks to a stable government and strongly growing economy, we have considerable confidence in being able to make a strong contribution to the Country's ambitious infrastructure and road building plans.
When the market as a whole grows, the opportunities tend to grow multifold which results in growing base of players in the segment. However, Volvo CE continues to be a leader in technology and innovation worldwide including in India. Our product plan guarantees a continuation of the good position.
What kind of technical and engineering innovation in future concept products can come from Volvo R&D Centre in the next few years which can be called ‘new generation equipment' creating a market differentiation in terms of efficiency performance and their related aspects?
Volvo has long been committed to producing new technology that is appropriate to customers' needs. Throughout the business cycle, Volvo consistently dedicated substantial sums to research and development. New technology doesn't have to mean complex systems – sometimes the best ideas are the simplest. We keep an open mind when it comes to producing new products and services. But the most significant change recently has been the development of CareTrack, which has a great potential to improving customers productivity and profitability.
What are your plans to introduce SDLG in India—will you adopt the same dual brand policy as in China or will sale under Volvo brand?
We have been promoting our SDLG branded wheel loaders since 2010 and we see high potential for this product. We have developed separate network for distribution for marketing and servicing SDLG branded products.
A word about Volvo commitment in developing and sustaining global supply of equipment and components with its iconic brands in the construction equipment market globally as well as locally?
As we have done in the last 15 years in India, we are committed to develop and grow our business here. We continue to grow our business globally too. We do review our strategy from time to time to make sure that we are present in all markets globally and also take advantage of growth.
Please tell us about your remanufacturing programme.
Volvo Construction Equipment is launching the Volvo Reman, Factory Remanufactured Components Program – an initiative from Volvo CE to encourage users to keep their Volvo machines genuinely a Volvo. Volvo Reman program allows users of Volvo construction equipment to have their used components renovated to the same condition as new, thus limiting the scope of environmental damage. This program is a natural extension of Volvo's commitment towards a greener environment – by the creation of an eco-cycle.
Volvo CE has opened a Volvo Reman centre at its facility in Peenya, Bangalore to ensure that customers get the true value of Volvo.
Backhoe loader has the largest share in terms of volume in construction equipment market in the country and it continues to remain a dominant workhorse of the industry, dominating the market. Why didn't Volvo CE so far enter into the backhoe loader market which is staggeringly popular in India? What is company's rationale of staying away in this segment?
We do evaluate backhoe loaders market in India very often. Our strategy is to evaluate how competitively we can offer our backhoe loaders in the Indian market vis-à-vis other contemporary products in terms of technology. We also look into the backup customer support and the service solutions we can offer for our backhoe loaders with a competitive note. We will not be able to comment about our evaluation and strategy at this point of time.
NBMCW May 2011
