Competing with the best, consolidating market position

Ajay Aneja,
Brand Leader,
CASE India.

CASE India is setting new benchmarks in terms of products which are in a right price and right way. Ajay Aneja, Brand Leader, CASE India, puts the spotlight on the company's growth strategy in the diverse construction and infrastructure market

How has been your company's performance in the last couple of years?

Overall, the infrastructure and construction industry has been doing fine since 2015-16. The financial year 2017-18 has been the third consecutive year for growth. We have been growing in line with the industry. On some of the product lines, we have consolidated market share even more. So overall we have been growing faster than the industry over the last three years. The exact cumulative figures, however It is more than 30% in terms of growth this year versus the last three years. The backhoe loader market has grown by around 45% year-on-year.

Is this growth percentage applicable to your company or overall industry?

It is applicable for the overall industry. Our growth will be about 35 to 40%.

In what particular segment?

It is in the backhoe loaders segment.

If 35% rise is justified to the overall growth of the industry , are you satisfied with these numbers or you believe that there is more room for growth?

The industry has grown by 45% and we would have also grown by 45% or even higher. Now whether this growth is going to be sustainable in the next year remains a question mark.

How about the growth factor in the graders market?

This year, the graders market has been lower than anticipated, while we have grown our market share in the graders product category. Of late, we are seeing that the awards which are happening for the roads have come down. Nearly 4,000 km was the award that they had planned to bid out in the first six months of the fiscal year. But their award has been very minimal compared to that. If the new road projects do not get awarded then this growth rate will come down. However, as far as our product is concerned, we have been able to establish a good pace. We have now built a quite loyal base of customers because they are satisfied with our product. We do not see a challenge in terms of growth or even gaining a market share. Meanwhile, the industry size could get impacted because of these challenges that it might have reached.

Considering that your market share is down in a particular region, then how do you address this issue?

The market share are down because we have had some fundamental challenges in terms of  network which we are trying to correct now. For example, the numbers in Tamil Nadu had come down drastically but now the market has started to gain share once again. Similarly, if you look at Andhra Pradesh, we have gained share in the market. On the other hand, Telangana is one area where we need to improve our share. Similarly, Karnataka is another market where we have our share. So we are working on, we are looking at our networks, we need to even rationalise some of the territories and appoint some new dealers who can support us in getting more market share. First is the coverage part, while second is improving the skilled labour market, including our team and salesmen of dealers. While addressing the coverage part, I am able to cover a larger market but I need people to actually convert customers through their interacting skill sets. These are the two areas we need to work on. Third, we are working on improving our value proposition with the customers. In the current bauma CONEXPO also we have launched some new products where we have upgraded them so we offer a better value to the customer.

For example, we have come out with telematics solution with Bausch so customers should get better productivity and lower cost of things.

Apart from the technology challenge in innovation, there remains a shortage of skilled labourers as well. Now, there is a need to impart training to improve skill-sets of manpower. How are you going to cater to this kind of challenge?

Technology is actually doing something different. In some of the cases it is making the machine work independent of the operator. For example, if you have telematics, it is independent of the operator and the owner knows as he gets a reminder that the service level of his machine is due, he knows what is the fuel consumption of his machine, he knows how many hours the machine has run, he knows whether he has work in the area where he wanted to work. In a way some of these things are becoming independent of the operator. Tomorrow even if he gets any operator he still has a tool which can independently tell him how the machine is there. Yes, there is a challenge in terms of the basic skill level of the operator that we have and that is why everybody is investing to have a skilled operator.

Is it possible to invest so much in R&D as well to such a level that the BS4 norms have been taken care of without affecting the market of the machine?

That is not going to be possible. Everybody will have to increase prices. There is a cost for that technology. Now whether you import and sell, or you make it locally and sell there is a certain basic cost that will be there for that technology. By that cost all product prices will go up and most of the times whenever these changes happen, for example, in commercial vehicles these costs get passed on to the customer. No manufacturer would make their margin zero and then sell the product. We are here to do business. So this cost will get passed on to the customer.

What products did you launch at bauma CONEXPO India?

We are introducing products for on road as well as general construction. For example, on road construction we have launched two new products, two new compactors. One is a soil compactor called 1110EX. This is a soil compactor which is the next level to 1107. This comes with a 110 HP engine. It comes with HVAC an air-conditioned ROPS and FOPS cabin, while rest of the features are the same as a soil compactor. It also has a much larger compaction force. This compactor is intended for road construction, application and this makes the operator environment much safer. In a soil compactor there is a lot of dust that goes out while compacting soil, which makes it easier for the operator to function.

What are the features about the new product that would make things easier for an operator to function?

There are two-fold benefits. One benefit is the compactor itself as it will give higher and better compaction because of larger weight of the machine. It extends a much safer environment for an operator to function. It is an air-conditioned environment with a rollover and a fallover protection system. In case of an unfortunate incident if any tree trunk or something falls over the machine, the operator continues to remain safe. Similarly, if the machine topples over or goes on a cliff, then also the operator is safe.

What are the innovations that have been introduced in the new compactor?

If the owner is also the operator then it becomes much more comfortable for him because he operates from an air-conditioned cabin. The second machine is a tandem compactor 752EX. We did a preview at EXCON last year. That was a concept. We started selling it in the third quarter of next year. We are launching it in bauma CONEXPO. This has a host of features for a customer and an operator. For instance, it has the best visibility of all the nozzles with spray water on the drum, the tank is fibre-reinforced plastic (FRP), so there is no chance of any rust coming into the nozzles and blocking it. The engine is Fiat Powertrain Technologies (FPT) offering reliability and strength. The seat is sliding and rotating both which means the operator can go up to the divider for compaction without leaving even a millimetre. Otherwise generally operators do not go up to the divider of the road.

They leave a patch between the divider and the road compacted and that is the area where maximum time road comes out. Because he is sliding and rotating, he can see up to the edge of the drum and bring it very close to the divider. When he does that, the steering becomes very far away. This also has a feature of tiltable steering, when he is at the extreme corner he can also tilt the steering towards himself to control the machine better.

And since he goes in both the directions, the forward reverse lever are located on both sides of the seat. It is possible to shift operations from the right to left hand. Moreover, there is less fatigue as well. These are some of the innovations that we have introduced in this compactor.

Do you consider neighbouring countries of Nepal, Bangladesh and Sri Lanka to be big markets?

Definitely, all the three countries remain important markets for us. Of these, Nepal remains an important market for backhoe loader as it has large TIV or industry volume. Similarly, Bangladesh and Sri Lanka are still  not so vibrant  market in terms of loader backhoes. In this regard, Nepal remains strategically important.

Is there any additional information that you would like to share with contractors who comprise a substantial part of our readership?

We would like to communicate that being a multinational company we bring the best features and technologies available globally to India so we can contribute to production processes through our efficienct products. What we expect from the contractor community is reciprocity in the form of a a willingness to pay for technologically superior products being offered at the right price.

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