Escorts CE gives higher ROI

“We are constantly monitoring the product as well as improving the service set-up by skill sets and attitude to be amongst the top two in the industry,” explains Rajinder Raina, General Manager – Marketing, Escorts Construction Equipment
Although the construction equipment industry has been witnessing a negative growth, everybody is expecting improvement from August. Rajinder Raina shares how the industry is going to turn the table and become profitable again.
As compared to other countries, how is India faring in terms of providing state-of-the-art construction equipment technology?In the last decade, in particular, construction processes have evolved and matured to international levels. This has been made possible by contemporary construction equipment, i.e. contemporary in technology. Most of the global players in this industry are present in Indian market, either directly or through JVs or through distributorship agreements. Highways, airports, metros etc. bear testimony to this fact.
What are the major challenges the construction equipment industry is facing today?Construction equipment industry has been witnessing a negative growth and hit a low of around 35 per cent on year-on-year basis. Sustainability has become a huge task. Everybody is expecting improvement from August. Once the sentiment picks up, we’ll see a bit of funds flowing in to the country, and that should mark the beginning of the upswing. The last quarter of this year should certainly be much better than the one in 2013. Industry has to manage to keep its wheels moving till then.
Could you tell us about your technological innovation in backhoe loaders?Escorts was amongst the last entrants in this equipment segments. Given the competition, it was essential to come up with a product that delivered to the customer much higher return on the investment compared to the top three players. Our backhoe loader model Digmax II is up there on technology with best of the features. More importantly, it is what gets delivered to the customer: low fuel consumption per unit material excavated/loaded and also high productivity per hour. The GPS system has been very well accepted in the market. The feedback from ground zero tells us that the product is far ahead of competition in the Indian market. We are constantly monitoring the product as well as improving the service set-up by skill sets and attitude to be amongst the top two in the industry.
Are you going to introduce any new product in this segment?We don’t intend to launch any new products in the next six months in this segment. However, attachments and customisation of machines as per requirements will be continued.
How do you look at the availability of finance for procuring construction equipment?Lately, money has become expensive as well as scarce. Due to the market conditions, the proportion of delinquency has been increased. With the result, financers are busy on recovering money from the existing customers. They are more careful to finance particularly in case of first time buyers and first time users. Some of the financers have in fact stopped financing for a while. This has impacted backhoe loader industry more as the percentage of first time buyers, and users is much higher here. However, I am sure this is a temporary phenomenon and the correction will take place in due course.
How did your company perform during the last fiscal, and what are your targets for coming fiscal?We will be ending our financial year on March 31, 2014, with negative growth but the good news is that we are better off than the industry as a whole. Some hard work on cost control helped us a lot. This benefit will yield recurring benefits. For the next financial year, the industry is looking at not more than 5-7 per cent growth. We, at ECEL, are sure of a growth more than 10-12 per cent particularly on the back of performance of Digmax II.
Can you talk to us about your long- and short-term objectives in construction equipment?We look to our growth through a portfolio, comprising manufactured products like cranes, backhoe loaders and role compaction equipment and traded products like forklifts, loaders, tower cranes and truck cranes. Increased focus on after-sales support should give us a decent parts business. As a leader in crane market, we’ll perform the role of introducing new products with improved technologies, delivering required output in a much safer, contemporary way. We’ll keep an eye on major projects and keep on making changes to deliver project/application specific cranes. We’ll continue to operate by capturing customers’ voice.

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