Increasing local content, expanding dealer network to drive growth
Volvo Construction Equipment (Volvo CE) has hit the accelerator pedal in the Indian market, coming out with new products crafted to suit the needs of local customers. The company had introduced its EC200D excavator at EXCON in December 2017 and brought in two more additions – the L90Gz wheel loader and the DD100B double drum asphalt compactor – in December last year at the bC India fair.
Volvo Construction Equipment (Volvo CE) has hit the accelerator pedal in the Indian market, coming out with new products crafted to suit the needs of local customers. The company had introduced its EC200D excavator at EXCON in December 2017 and brought in two more additions – the L90Gz wheel loader and the DD100B double drum asphalt compactor – in December last year at the bC India fair.
The company has consciously engineered its products to cater to a larger audience in the market and is actively reaching out to a wider customer base in deeper pockets of the country.
We spoke to Mr. Dimitrov Krishnan, Vice President and Head, Volvo CE India, about the company’s strategy to tap into a larger customer base with its new product offerings, plans for 2019 and more.
Excerpts:
You had launched the EC200D excavator in 2017. How has the market accepted the product and how has your experience been?
The EC200D excavator falls in a different customer segment than what we have been traditionally serving in India. The initial response has been very positive – the machines are performing well and we have had repeat purchases and fleet deals. I wouldn’t say we have reached our full potential with the product because it’s a customer segment which our distribution channel is just getting used to, but wherever we are gaining a foothold we are able to maximize it beyond selling just one equipment, mainly due to positive customer feedback and word-of-mouth marketing.
Since it’s a new customer segment for Volvo CE in India, how are you reaching out to these customers?
We had to tap into our non-traditional markets. Volvo equipment are typically highly productive and hence suited for users in production applications like quarries, mines, limestone applications or irrigation jobs which involve a high volume of earth-moving. These customers are typically multi-equipment fleet owners with whom our distribution channel works quite closely.
A typical 20-ton equipment buyer is usually an owner-cum-operator or a single machine buyer who is graduating from a backhoe loader to an excavator; this is a customer base which is new to us and to whom Volvo is new.
We are increasing our distribution reach, opening new branches and reaching smaller locations where we have not been present until now. We are also using digital means to access these customers because most people are using the internet to look for equipment. We are doing all that it takes to get closer to the customers and communicate to them about the superiority of the Volvo brand and our products.
Being a premium brand, what steps are you taking to ensure customers don’t feel your products are ‘not that affordable’ when compared to other options they have in the market?
Volvo will always be a premium brand but we always ensure we are able to deliver value for the additional investment the customer makes on our products. After all, an excavator or a compactor are not luxury products, they are business products that must generate returns for the customer.
On the product side, we are investing on increasing the localization of our machines. We have started manufacturing the EC200D locally at our Bangalore plant since January this year, with a very high level of local content, while our 210 and 300 excavators were localized much earlier. We are also increasing the percentage of local content in these products which makes us a local player participating actively to develop the industry.
On the financial side, we are looking at ways to make it better and easier for customers to adopt our products by providing financial support through Volvo Financial Services (VFS). We try and make it more affordable for customers to own a Volvo machine through competitive EMI schemes and leasing solutions.
What new products from your global range would you look at introducing in the Indian market next?
We are offering more or less the entire product range we need for the Indian market. One segment where we are not yet present is smaller excavators below 10-ton; the market is not yet ready but we will definitely look into that space as it is a growing market. As urbanization grows, the mini excavator segment will grow and we will definitely want to participate in it.
We have a reasonably strong market share position in wheel loaders and compactors. In excavators, we would like to do better by participating more actively and widely in the retail segment.
What are your targets and plans for 2019?
We are looking at a small growth because we do not expect the overall market to grow big time this year. Even if the market does not grow, we would like to grow, primarily by expanding our distribution reach. We have a network of 17 dealers at present and plan to increase it by over 20 per cent so that we have at least one dealer per state.