Headquartered in Brussels, Volvo Construction Equipment has production facilities all over the world. Their many facilities around the globe produce a comprehensive range of wheel loaders, excavators, articulated haulers, soil and asphalt compactors, pavers, compact equipment and material handling equipment. With over 180 years of construction and innovation expertise, Volvo CE is at the forefront of technological development.
Dimitrov Krishnan, vice president and head of Volvo CE India believes that while the needs of the Indian market are unique, they are not unprecedented as many countries have experienced similar processes of infrastructure development and economic expansion as talks to
EPC&I on the challenges of the CE market in India while shedding light on the products and services to be launched at bC India 2016.
As an established leading player in the Construction Equipment market in the country, what is your opinion on Infrastructure development activity in the country?
The majority of the infrastructure focus has been on road building, with the much-publicised target of 40km of new road to be built every day during 2016. Our experience at Volvo CE is that activity levels are high in this sector with numerous projects progressing. For other projects and activities in the infrastructure sector, activity levels have not been so high.
While some research analysts and economists claim that it is skewed more towards road building activity, development of power plants, ports, airports, etc continue to lag behind. Do you subscribe to this view?
We agree that the majority of focus has been on road building work. Other sectors are not experiencing the same high levels of activity.
What would you say are the main growth drivers in a highly competitive market?
Clearly, government policy has been the main growth driver for infrastructure development.
How have the policies and initiatives taken by the government to develop the country’s infrastructure reflected on your company’s growth?
Government policy is driving much of the current demand in the construction equipment sector. The high levels of demand we experience at Volvo CE are a result of this. In addition, we are seeing a growing preference among our customers for the leading levels of ROI and performance that our machines deliver.
What are the company’s expansion strategy and potential segments in Indian construction equipment business?
Our focus is on steady and sustainable growth. Volvo CE is one of the longest serving global manufacturers in the Indian construction equipment market, and the only one with a strong presence in each of its key sectors: general construction, mining and road building.
We are fortunate that we have a strong team, large manufacturing plant and nationwide dealer network that enables us to offer the highest levels of service to customers in India. Additionally, our history here, and globally, means we are well-structured to take account of the cyclical nature of the industry. As we are already a full-line provider of equipment, we are not targeting particular segments of the industry as part of our expansion strategy, but rather building on our existing strengths.
In the face of aggressive competition putting strong price pressure, coupled with the liquidity in the market which will impact cash flow and profitability, what are the transformations that leading companies such as yours need to bring about to ensure that you not just grow at a predetermined rate but grow substantially?
At Volvo CE we address the issues of price and liquidity in two important ways. First, having a factory in Bangalore which supplies much of its output domestically, means we have a strong focus on producing machines that are designed and marketed to suit the needs of Indian customers, including ensuring that they are priced appropriately.
Second, we support for liquidity through our Volvo Financial Services arm, which is able to offer a variety of funding options to clients, to support their investment in Volvo CE machines. Overall, as the construction equipment market in India continues to mature, we’re seeing businesses become increasingly sophisticated in their approach to machine investment.
Many manufacturers in the country are making innovative strides to modify their existing lines to enable them to deliver higher production outputs, improving the productivity and, simultaneously, offering a good RoI. What are your plans on this front?
Volvo CE is recognised as one of the world’s most innovative manufacturers of construction equipment, so we are already leading advances in terms of improved ROI for machines through better productivity and production.
One of our central pillars is our drive to offer the best possible levels of fuel efficiency. This not only delivers better ROI for owners through lower running costs, it also extends into other areas of design, such as ensuring optimal efficiency in the hydraulic system to deliver application-targeted operating capabilities.
Reliability is a further consideration. While faster cycle times and more powerful performance deliver greater output, real gains in ROI are seen in designs that include longer working periods and easier service and maintenance. Again, you can see this approach to design factored into Volvo CE machines.
How is the technology placed to suit Indian requirements taking into consideration that the equipment works for extended duty cycles and adverse conditions within the country?
At Volvo CE, we ensure our machinery is capable of working for longer duty cycles through advanced design and testing; high quality manufacturing; and easier service and maintenance. While the working conditions in India can certainly be adverse, they are not unique. Our experience as a major global manufacturer helps in this regard, ensuring we have the knowledge and skills to produce machines capable of performing no matter how extreme the working environment.
OEM support and co-operation for future product upgradation is important. How are aspects like prototype performance assessment in varied working conditions being addressed based on the emerging requirements of the Indian customers?
While the needs of the Indian market are of course unique, they are not unprecedented. Many countries have experienced similar processes of infrastructure development and economic expansion. For us at Volvo CE, we believe that product development for any market should combine proven technology with an adjustment for the needs of local industry.
A good example is the launch of our two new compactors at bC India, the DD90B and the SD110BA. These two machines are based on proven Volvo designs but, crucially, they have been adapted to suit the needs of Indian customers.
How are you addressing issues regarding affordability, business expansion and retention?
In regards to affordability, we build several machines locally at our Bangalore manufacturing plant, which means we can source local components and customers are not paying large shipping costs. But it’s also important to remember that understanding the true ROI of a machine should be more important than focusing purely on affordability.
ROI takes into consideration the output, reliability, fuel efficiency and operating costs for a particular machine and investing in a product with better ROI ultimately boosts the profitability of an owner’s business.
In terms of business expansion and retention, for Volvo CE, it is a case of building on our solid base. For example, we already have a skilled and experienced network of dealer partners. So, our focus is on continually developing these partners, and providing them with additional tools and training that will allow them to provide even better service to customers.
Also, by continually updating our product line and services, ensuring they are well-suited to local customers, we can continue to maintain our position as one of the market-leading suppliers in India.
What would you say are the primary challenges going ahead?
The outlook for our industry to 2020 is generally positive, although it’s important to recognise that there is still quite a lot of uncertainty in the global economy, and this might impact India. The current targets from the government are ambitious, so there will be a challenge for contractors to meet those targets. Most obviously, there needs to be a significant increase in the equipment base in India to meet output targets.
What is your forecast of CE demand in the days ahead?
Our company has enjoyed a very successful year in 2016, and the outlook is positive. Demand for road building equipment has been high, as have interest levels in mining equipment, although that interest has not translated to sales as much as we would have liked.
Lastly, any new products and services expected to be launched at bc India 2016?
Two new compactors will be formally launched at bC India, both of which are built at the Volvo CE manufacturing facility in Bangalore. The new DD90B double drum compactor and SD110BA single drum compactor have their origins in proven Volvo designs, but feature a number updates to make them even more attractive to Indian customers.
The introduction of the units is timely, with pressure growing on contractors to ensure projects stay on schedule as the Government of India targets 40km of new road construction per day.
Maintaining the strong focus on road building at the show will be the P5320B ABG paver which is appearing at a trade show for the first time, having launched earlier in 2016. Like the new compactors, this advanced paver is also built at the Bangalore factory and delivers exceptional paving quality and productivity, as well as easier operation and outstanding fuel efficiency. It offers excellent versatility across both medium and large-scale projects where paving widths range from 2.5m to 7.0m.
Alongside the compactors and pavers Volvo CE will display two of its advanced excavators from the D-Series. The 21-ton rated EC210D and 25-ton rated EC250D represent the latest in construction technology and are well suited to a range of applications including road building, irrigation projects or work in materials handling duties. As well as superior performance, D-Series excavators can also deliver up to 10 percent better fuel efficiency than their predecessors.
Aside from the products on show, Volvo CE will be running a variety of activities over the course of bC India 2016, making it a must-visit destination for attendees. To underline the company’s industry-leading customer support program, there will be a dedicated area showcasing the aftermarket products and services available from Volvo CE.
Visitors can also pitch their skills against others, in the Mini Operator Championship, using Lego models of its trademark machines.
Elsewhere there will be quizzes, with the opportunity to win amazing prizes, while a selfie contest will run for the duration of the show. The best selfie-photo taken on the company’s booth and posted to its Facebook page will get a gift, plus the opportunity to take an additional commemorative selfie.
“The current targets from the government are ambitious, so there will be a challenge for contractors to meet those targets. Most obviously, there needs to be a significant increase in the equipment base in India to meet output targets.”
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