Kobelco Construction Equipment India Private Ltd. (KCEI), a subsidiary of Kobelco Construction Machinery (KCM), Japan, was established in the year 2007 in India with headquarters in Noida. The company has nationwide network of dealers and invested in a manufacturing facility located at SriCity, in Andhra Pradesh, about 70 km from Chennai. This factory commenced production in 2011. Mr. Vikram Sharma, MD & CEO, briefs about product program in the segment and trends.
Please indicate the models supplied for the applications, USPs and focus segments. TCO becomes critical for the production machines like excavators and backhoes; and in this regard, how do you find your machines meeting the above requirement?
Kobelco is a global leader in the manufacture of Hydraulic Excavators. The product range starts from the Mini (1 Ton) to the large (80 Ton) Mining Excavator. In India though, we manufacture three models ranging from the 14 Ton, SK140HDLC to the 36+ Ton SK380HDLC. In terms of volume, the 20 Ton SK210HDLC has the largest share. Kobelco excavators are renowned for their best-in-class Fuel efficiency and productivity. There is a very clear focus on providing prompt and quality support to the customers to ensure high levels of machine uptime. In view of the Govt. focus on building Infrastructure, most units are sold in this segment with Roads leading the way. Mines & Quarries are another major category.
Total Cost of Ownership is a more realistic and reliable basis for comparing equipment. Our machines, with a relatively higher up-front cost, actually show considerable advantages in terms of TCO. We do not encourage any dilution of the initial stake of the Owner as it is likely to have a negative impact.
Backhoe and excavator corner maximum market share in CE domain and backhoe dominate the scene – what are the factors for such a trend in the local market? Can you comment on the rental, used equipment market and buy back schemes?
Backhoe Loaders have been highly popular in India due to their versatility and ease of deployment. Internationally, especially in developed markets, Excavators are more popular as various types of attachments are available with quick changing options.
As regards rental and used equipment, these are options which could evolve over time. We encourage our Dealers to look for such opportunities in their respective markets.
How did you manage to tide over the steep market decline from a peak level of 70,000 plus units in FY 2011? When do you see this figure getting significantly crossed, momentum sustained and the nos. coming closer to 1 lakhs units?
We were probably the only one in our specific segment who could maintain a growth even during the overall decline. Consequently, our market share increased substantially during the past few years and we are among the leading five. The market is showing a positive trend since the last year or so and may well grow beyond the last peak level in another two to three years.
Man-machine combination is considered critical in achieving overall productivity. In this regard comment on the importance of driver skillsets, training, availability, operating cabin ergonomics/comfort, etc., to meet the above objective.
Kobelco has always recognized the importance of providing the most conducive working environment for the machine Operator for achieving best productivity and safety. The Cabin is ergonomically designed and is air conditioned with climate control. The Operator’s seat is with multiple adjustments to suit individual requirements. The Control levers / pedals are placed most conveniently and require minimal effort. The entrance / exit are safe and convenient and the view allows the Operator to have full control over the work area. Powerful and convenient lights facilitate night operation. The sound level is best-in-class. Operators are trained for safe operation while achieving high productivity.
Can you comment on impact of technology down the timeline? viz., hybrid solution (energy regeneration), fuel economy, electronics, telematics, automation, etc., on the earthmoving segment?
Technology has had an increasing impact in improving the operating efficiency, productivity, reliability and safety of Construction equipment over the years. It has also enabled manufacturers to meet the challenges emerging from regulations on emission norms and safety. Technology has been the key solution-provider for manufacturers in meeting growing customer expectations on a wide range of parameters like fuel efficiency, output, TCO, etc. It has also helped in empowering Customers through features like remote-monitoring, choice of operating modes, etc.
How do you see the market evolve over the next 4 years (in terms nos.); Tell us also about the impact of GST, pollution control norms and demonetisation on the CE markets?
It is anyone’s guess at this stage as many market forces are at work and there are some disruptive forces as well. However, considering the trend of the past one year, one can see the healthy turnaround in several segments. Some segments have yet to show similar trends. Subject to factors like implementation of the ongoing initiatives and schemes, the gross market size can well be double of the size in 2014.
Kobelco is regularly exporting to various markets in South-East & West Asia as well as East Africa. The Indian plant will start rolling out the latest Generation 10 series from this year and this will improve the market share.
GST is not likely to impact us very unfavourably. Rather, it may help us reduce our logistics cost. However, it may be a bit premature to conclude as such, as several aspects are still being debated between the Centre and the States. Demonetization had a very marginal impact. Pollution control norms will actually impact us positively as our machines are already complying to current international standards.