Sanjeev Bajaj, Chief Executive, Escorts Construction Equipment, talks to Sarada Vishnubhatla on the sidelines of the launch of India’s first hybrid pick-n-carry NXT13DC CNG and another first, Mono Chassis Safe Crane RC2522 at EXCON 2022 – about CE market trends and how Escorts is on top of the rising demand with apt products.
Market Drivers
With the pandemic chaos and an equally tough situation that came with enforcement of BS IV emission norms have added costs to all products above 50 HP. Simultaneously, the price of steel also went up and it has remained so till the last quarter. The overall cost increase in one year translated to 30-35% hike for the end customer. In contrast, the rental rates have remained almost the same. It means margins are getting squeezed by all stakeholders – be they rental companies, and the manufacturers and as a result the customers are delaying their decisions or opting for cheaper products. The retail business for machines such as backhoe loaders, or small hydra cranes continues to remain under pressure because of the lack of viability at increased prices. But the project-based buying is continuing keeping the demand up. Big customers such as corporates or fleet owners are still able to make a business case, pushing the demand. Infrastructure projects, steel sector, bullet trains are some areas where projects are moving fast.
Escorts Range of Products
We have a complete range of compactors now besides mass products in both yellow and white line series. We have added motor graders too this year. One of the models in motor graders 585 in 10-ton class is showcased here and one more model will be launched soon.
We have a customer app which they can use to request for a service, access training programs and videos. They can also inquire or register complaints using the smart app. The app can capture information which is made available to the customer in an easy and usable mode. We aim to keep our equipment and their operators safe, help owners manage fleets efficiently and also manage cost.
Trends Ahead
Today, one of the major problems for the customers is the stability of the crane and the lifting capacity at a certain height. With multi-storey buildings being constructed more, precast is preferred in construction. This means the cranes should be able to carry heavier loads and reach greater heights. With traditional crane models, safety is compromised. Versatile products suited for large constructions are required that can be used across a wide range of projects and our RC2522 fits in perfectly. This model also offers a short turning radius, and can be used as both a fork and a tele handler. RC2522 offers double the capacity compared to those offered by the same in the market which is 4 tons at 17 meters height. So, with RC2522, we are giving a multi-purpose platform, where as per the usage, the operator can go two levels up or down on the same platform.
Also with the central government’s announcement on the infrastructure development, the demand will increase helping customers holding a mix of old and new cranes and road construction equipment be viable. But this will open up more opportunities where, for example, customers will buy more machines and thereby hedge their risks in the rental business. This demand will also help them to recover better prices from their customers – which will be a win-win for the whole industry.
Strong Aftersales Support
As a crucial piece of equipment that is used by many to earn a livelihood, a breakdown is a huge cost to the customer. Hence, we offer a comprehensive ecosystem which goes beyond offering reliability and durability. We offer support system around the product itself with our strong network of 83 dealers and about 200 touch points across India. Then, we have about 350 authorized service centers, which we are developing to bring them on par in terms of training and their capabilities. Our endeavour is to ensure that our customers get service and parts every few kilometers.
Escorts was the pioneer in the construction equipment industry to work on a distribution model. Today we have 53 distributors across the country, who also carry spare parts. In short, spare parts are available at dealers, distributors, and at the retailer shops besides of course the mechanics in the open market and the authorized dealerships.
Business Prospects in Future
Escorts already has a strong presence in rural India and we are focused on urban construction as well. We believe that construction activities that are happening today in tier-1 and -2 cities will eventually move to tier-3 cities and then to rural landscape. As a company, we are placed rightly because we have the products that are needed to build the rural roads that have to reach the last house.
Focus on Aftermarket
Aftermarket is an important avenue for growth not only for us but also for our channel partners. Equipment sales is definitely a large part of revenue giving us big margins. But for the channel partners, earnings come largely from the aftermarket because once he has established his base, then 100% of his running costs get covered from servicing and part sales. His earnings from equipment sales become his profit.
EXCON Highlight
We believe that any lifting equipment must be safe, stable and versatile and our customers. The fact that today craning operations need to adhere to stringent safety aspects requires for the equipment also to possess that capability and intelligence to keep the operator and the people around it safe. They have liked this tremendously. Our primary intent for EXCON 2022 was to showcase our technology and get direct feedback from the customers to our newly launched machines, and we are sure to work on further to innovate technologically.
Catering ‘right products for the right customers’ – whether at EXCON 2022 or in business – is what is winning the game for Escorts Construction Equipment!