Satish Purohit interviews Jeet Kasar, Country Manager, India, Sinotruk International,
on the group’s entry into the Indian market with their heavy-duty mining truck.
You have entered the Indian market with one mining truck named Howo Mine King despite your extensive catalogue of products? Could you tell us the progress made so far?
For this mining truck, we formulated a strategy by the end of 2017. We tried to target a niche market with the most potential for high growth. The truck was officially launched on 31st Oct 2018 in Kolkata & we have done trials of this truck in Kusmunda mines in Chhattisgarh region with one of the biggest contractors in mining. The trial period was for 3 months to understand the fuel efficiency & productivity of the truck. The trial results were highly appreciated by our customer & got rewarded with 1st order. Sinotruk zeroed in the mining industry and the infrastructure field as the product offered is unique for the market.
Why did Sinotruk choose mining as a point of entry into the Indian market?
In Indian mines today, the scenario is that most of the trucks which are used are on-road trucks. Even if it is a HDT manufactured by our competitors, who are 31 tonner & they can be used for hauling loads up to 50 tonnes. In comparison, Sinotruck has been designed for 100 tonnes GVW, it carries weights up to 70 tonnes. In the present market, if your truck is overloaded, it would run high maintenance cost and give comparatively low productivity. Sinotruck on the other hand offers low maintenance cost and higher productivity. In order to ensure that high levels of productivity are maintained, we rely 100 % on heavy duty axles & better engine. Presently, we are importing CBU which puts pressure on customer considering high import duty. In future, we have plans to start local manufacturing here, which will help us slash costs and we will be able to deliver our superior quality product at rates that will be more competitive in comparison with other brands.
How expensive is your product compared to other brands in the same category?
Dumpers are our real competition. A dumper that carries our loads would have cost is Rs 3 crore had it been designed with the same specifications. Our truck costs about half of that sum, which is price that buyers are already paying for trucks with lower load capacities. As of now, there is a fear of change for everybody. Whenever you bring anything new, people tend to be uncomfortable in the beginning. People question it and think that it is impossible for a truck to carry 70 tonnes with 480 horsepower as they have not seen it happen. They told us that everything was fine on paper but that it would not work on the ground. So we brought five trucks here and everyone was surprised. Our competitor has a truck with 520 horsepower engine that carries 58 tonnes. On the other hand, our truck has a 480 horsepower engine and it carries over 70 tonnes. This is not magic. It is purely made possible by superior technology. We are entering the Indian market not merely by cutting price but by offering the best quality in the market and superlative performance, which are the two qualities on which we plan to script Sinotruck’s success. Sinotruck will broadcast the fact that it is providing cutting edge technology at a comparatively better price. Most European brands are actually quite expensive. In fact, the spare parts pricing is ridiculous in my opinion.
How does your mining truck fare over its lifecycle.
Our product is designed to complete 30,000 hours easily; it can even go up to 40,000 hours, which is almost seven years depending on a variety of factors. After completing 30,000 hours, there would be an overhaul of the engine and transmission system overall. This is likely to extend the life for the next 20,000 hours depending on the condition of the mines, operators and the territory where it is used. After 30,000 hours, you will go for the first overhauling and that is pretty much standard for all equipment. The high life is also achieved not only due to the good quality of a product but also from good service support from the OEM.
How exactly is your strategy for the after-sales service in India?
Earlier the Sinotruck strategy for the rest of the world is supplying good quality products at a good price and providing spare part support & Sinotruk had assigned dealers to take care of all those things in other countries most of the time. In India, we understood that things are not going to work like this so we are building our own technical team, which will train the technicians and engineers internally and externally who will provide service support and not just the spare parts. That is a major strategic effort, which we started in 2017. In 2019 we are witnessing that the trucks are on fields, where they are working perfectly. Most trials conducted by the competition were like five hours a day. Whereas, our trucks are working 22 hours a day. Today, more than three months of trials have been completed and no minor or major failures have been reported. All the scheduled maintenance, parts, and consumables have been arranged by us on time. All these things have been well planned in advance, which I feel is the way to gain customer confidence.
It is an exciting time for commercial vehicle segment with so much happening especially the infrastructure thrust. How do you expect this infrastructural expansion to impact the commercial vehicle segment in the next five to seven years?
For infrastructure we would clearly have two different products. One would be for mining, which is an off-road vehicle for large construction purposes like an airport or seaport as well as contractors who are into mining. Mine Developer and Operator (MDO) projects for coal blocks will benefit hugely from this product. Infrastructure development in India is very much on the up side and growing year on year. Earlier, there were small coals blocks open for mining. Now, there are several MDO projects. Last year, five such projects were allotted to various contractors. MDO projects are long-term projects, which may run for 20-30 years. However, equipment life is just for five years. In conventional mining, the contracts are from 3 years to 10 years maximum, the equipment get used and then you can bid afresh.
This mining truck remains a star at the moment. So when do you begin distribution?
We already have started sales and distribution. We have bagged our first two orders. We have first order of 200 units and second order is of 50 units for different companies in Chhattisgarh. So, it is a good start.