Innovation is order of the day
In the highly competitive market of backhoe Loaders and Excavators, Mahindra Construction Equipment is carving a niche for itself with innovative solutions. Sachin Nijhawan, Vice President and Business Head of the company tells Shashidhar V why providing affordable technologically advanced optimised solutions for the developing world will be key to growth.

How do you see the infrastructure development activity in the country influencing the growth of Excavators and Backhoe Loaders market over the past year?
The Planning Commission estimates total infrastructure spending to be about 10 percent of GDP during the XII Five Year Plan (2012-17), up from 7.6 percent during the previous plan (2007-12). Investment in infrastructure and road building sector with projects like Bharat Mala are the main growth drivers for the construction equipment industry.
With these investments set to go up, demand for construction equipment can be expected to rise and the equipment sales are estimated to expand at a CAGR of 6.2 percent.
At present, construction equipment sector is mainly dominated by backhoe loaders, with more than 40 percent of total demand. But broad-based growth is expected across products, with each segment expected to see growth.

Talking specifically about Mahindra CE, what has been the YoY volume growth in Excavators and Backhoe Loaders over this period?
Mahindra Construction Equipment has a good growth of the past year in the Backhoe Loaders segment to which we cater. We have increased our market share of the previous year, the only second player to do so after the market leader. We have reached the fourth position with increase in market share owing to over 50 percent growth in the financial year ending this march.

What would you say has been – and will be – the catalyst for this uptick in your business?
I guess it is because of multiple reasons. A push for improvement in infrastructure including outlay for roads, railways and development of smaller airports to improve connectivity, increase in real estate activities through affordable housing, and increased allocation to Municipalities under Swatch Bharat Campaign, which have all yielded to the potential to transform the construction equipment sector by leading to increase in demand in this business segment.

Considering the stiff competition in this product vertical, with many international players bringing in innovative technologies, why would you say the Excavators and Backhoe Loaders offered by you are the ‘go to’ products in the Indian market?
Innovation is order of the day, and we believe in providing the products and services which help the industry to rise. Mahindra Construction Equipment has always strived to give the best to its customers. It is for the same reason that we came up with the backhoe loaders after four years of research and over 20,000 hours of machine testing, which offers best-in-class fuel efficiency (4.5* litres per hour). In fact, when we entered the Construction Equipment industry with our backhoe loader, the Mahindra EarthMaster, it had many firsts.
Further, with better technology and design enhancements, our equipment is able to lower lubricant refilling requirement with extended service intervals, thus reducing the overall maintenance cost and improving total cost of ownership.

How are you addressing issues regarding affordability, business expansion and customer retention, considering the competition with almost similar products available today?
At Mahindra, we believe in providing value add to customers right from product development by utilizing the best technology. Hence, our EarthMaster is a truly personalized machine with new age digital cluster that helps the operator to identify and troubleshoot problems by reading messages and hearing warnings in six different languages.
If we talk about pre-sales services, then Mahindra allows customers to take the look and feel our equipment through dedicated demonstrations in their locality. Through this, customers and the operators are able to operate the machine and understand its various attributes. For post-sales services, Mahindra offers few days’ dedicated training for operators, in which operators are personally trained on various features of the machines by professional trainers. Customers are also entitled for One year unlimited hours of warranty. With all these and much more, our offers ensure peace of mind to the customers.

Earlier on, you spoke about gaining market share. Competition and technological obsolescence are some of the challenges that even leading players face. What are the steps and strategic decisions that you need to take (or have taken) to continue to maintain the healthy market share?
Mahindra and Mahindra’s strong R&D department of over 2000 engineers and with its decades of experience in engineering products that last long and provide great value, has made us attain a feat of developing a truly ‘Made in India’ backhoe loader without any overseas collaboration. Mahindra & Mahindra’s engineers continuously study the applications of construction machinery in India and design innovative products to meet the toughest duty needs of Indian contractors. This has been duly backed by not only the state-of-the-art manufacturing facility and processes but also the rigorous testing schedule.

Automation and Internet of Things are the buzz words. What are the initiatives that you are taking towards this end?
We were the leaders to provide telematics for remote care and joystick for ease of operation in the traditional backhoe loader segment. With the launch of new telematics system, DigiSense, by Mahindra group, our equipment would soon be loaded with advanced technology to track performance on real-time.

As far as OEM support and cooperation for future product upgradations go, how are aspects like prototype performance assessment in varied working conditions being addressed based on the emerging requirements of the Indian customers?
Aspects like prototype performance assessment in varied working conditions are the standard norms which we follow before the launch of any new product in the market. We have done the same for our past products and are currently doing the prototype performance assessment for our affordable technologically advanced optimised solutions for the developing world, which would be launched soon.

In your view, what do you forecast the growth to be for the Excavators & Backhoe Loaders market in 2017?
With all the focus of the present day government on infrastructure development, the future looks bright for the construction equipment sector. The industry has the potential to grow at a constant pace to reach improvement of 20 percent in the next five years.

Mahindra Construction Equipment has always strived to give the best to its customers. It is for the same reason that we came up with the backhoe loaders after four years of research and over 20,000 hours of machine testing.

We were the leaders to provide telematics for remote care and joystick for ease of operation in the traditional backhoe loader segment.
We are looking at around `200-crores by the end of this year
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