?The product USP is a combination of reliability, India relevance and cost of operation, ably backed by a highly efficient service network,? says Dr V Sumantran, Executive Vice Chairman, Hinduja Automotive. In an exclusive interview with Equipment India, Dr Sumantran talks about what differentiates Leyland Deere?s newly launched backhoe loader from others in the market. Excerpts from the interview.

Is there any specific logic to launch the backhoe in a very competitive market?
There are a number of factors that have driven us to focus on the backhoe loader. We studied the market pote?ntial and its growth pattern; we looked at our own ability to be competitive from Day One; another influencing factor is, we have industry professionals both from John Deere and from our team. Taking all these factors into con?si?deration, we decided to start with the backhoe loa?der, but this is not going to be a one-product enterprise. We have already started discussions on a range of products beyond this.

What are the core competencies that will set apart your product?
First of all, our reputation at Ashok Leyland has been built on reliability. Whichever new markets we have entered, it meant reliability. Similarly, John Deere has a phenomenal reputation for reliability, so both of us make sure that the products are going to be reliable, which means more fuel-efficient and more productive with less operational cost. This is a big USP in this segment.

Secondly, I think it is a rich blend of state-of-the-art technology and relevance. State-of-the-art technology alone is not good for India: what we have done is to intelligently blend it with what India really needs. For example, power shift transmission is top technology from ZF; on the other hand, the in-line pump with the Ashok Leyland engine will give you a solid and reliable performance under the various conditions of fuels that are available in the market.

And, the cost of operation is very important. We have been benchmarking all the products over a long period of time. We have been doing it on computers, field tests and actual usage. We could have had the product even earlier but we completely re-did the hydraulics, the pump and even the design of the bucket to improve fuel efficiency. Yes, we know that there are reputed players in the market but we are confident that we will be up there amongst them.

Have you factored in the usage patterns in the design of the product?
Very much so. A good example is, we have got a much larger air cleaner than others and certainly much larger than those used in other markets. We also fit a precleaner to increase the filteration efficiency. We know that the machine is going to be used in dusty conditions and may not be replaced very frequently. So we have built in that extra protection.

Another example: we have re-sized and re-tuned the hydraulics specially factoring in the methods and patterns of usage of backhoes in India. For example, backhoes are even used to demolish structures. We have been through those kinds of tests to look at the structure and the hydraulics and took a conscious decision to build the welding of the structure in-house. We have invested in robotic welding and all those major structures are being built in-house. Another example is, we have put in ROPS (Roll Over Protection System) and FOPS (Falling objects Protection system in the machine which are not legally required. We are not bound by regulations but we have done this for increased safety of the operator. So this, I would truly say, is taking the best of Indian experience and taking the best of Western technology and bringing them together.

How much of the the production has been localised?
I think by the time we are done, almost all of it will be localised. Today only some elements related to drive lines and some of the electronics are imported. We have plans to localise even those. But if you look at the big items, cabs, engines, and structures are local, so from Day One we have a high degree of localisation.

What about the engine?
To make an engine which is relatively easy to operate yet robust for Tier-3 is a challenge. But I think we have achieved the right combination and the engine we use is Tier-3 compliant.

What is the kind of market you are looking for?
We are always very shy about giving forecasts of num?bers. Frankly speaking, nothing is going to happen unless the product is right for the customer. So let the product speak for itself in the market. I think by the next year we will know how well it is received. We are very confident.

Brief us on the value proposition what you are providing to the client, please.
As I mentioned earlier, the product USP is a combi?nation of reliability, India relevance and cost of operation ably backed by a highly efficient service network. We are a new entrant and we are overcoming that by being innovative. We are employing IT very innovatively. We are making sure that parts availability is ensured from Day One; we have a rapid action team under the banner of CARE.

What is your take on the training part of matters?
We have a technical training centre in our plant which was not originally part of the plan. But subsequently we rea?lised that it was very important to train service technicians to a high level. Every dealer`s service techni?cians have been through this facility. They come in for hands-on training and many of them have actually put together machines and pulled them apart. We had the benefit of four to five months to get the techni??cians trained.

Tell us about the dealer network.
We currently have 20 nodes. There are currently 10 Tier 1 nodes and each of the p Tier 1 nodes will have seco?ndary nodes. As it spreads, the plan is for tertiary nodes, so we have almost a cluster system which will be most effective and this will roll out to become a pan India network.

But the availability of spares is a major factor in the purchase decision.

This is a very important element and we have factored this in our planning. We are aware that even if we go to a small village, there are original and non-genuine spares available. We have already stocked spares with dealers even before the point of sales. We have made arrangements for spares based on typically expected usage patterns to be available with our rapid action team. Sometimes, we use a range of distribution network agencies and avenues. We will get parts to the point of use as quickly as possible; that has already started off.

Has Leyland Deere taken any environment-friendly initiatives?
We are very concerned about the environment and our products reflect the best practices. On the product front, the cost of operation effectively leads to low fuel cost, that means low CO2 emission. On the material front, we have used innovative designs to reduce the intake of raw material without affecting quality, rather increasing quality and productivity; on the production side, we have a paint shop and associated facilities using the latest environmental standards for recycling and recovery of material, and so on.

How do you view the rising cost for input materials like steel?
Today that is the core competency in our industry, whether we are talking about commercial vehicles or off-road equipment. The cost goes up because of two reasons, one is the raw material cost and the other is technology cost, and our core competency finally boils down to our ability to innovate and our ability to provide value at a lower cost. For example, we have been able to not only imp?rove productivity of the bucket but actually reduce its wei?ght with a special grade of steel and an inno?va?tive design.