Our focus on the best fuel efficiency and faster machines remains steadfast
We have always believed that high technology will ultimately become the top need for India, and therefore all the machines we manufacture in India or import and sell, adhere to standards by which Kobelco machines are made anywhere in the world, says Vikram Sharma, Managing Director & CEO, Kobelco India. Excerpts from the interview.

The Off-Highway Research report indicates a sharp decline for the BHL market by 2016, from 52 per cent to 38 per cent. What is your take on this?
As regarding the growth of excavators at the cost of backhoe loaders, this is inevitable, since higher production machines will become the norm. This will be due to stricter time-bound project targets, as well as due to low availability of labour, and movement towards excavators will be a normal process. Nevertheless, both will continue to coexist, since our economy will always need backhoes for small hirers etc.

What have been the sales trends and demand-supply scenario for crawler excavators?
Excavators have grown very well whenever the market has shown a positive growth in the past. The HEX market grew at 30 per cent plus up to 2007, and then had a negative in the year 2008/2009 due to the global meltdown, but again grew at a healthy pace of 30 per cent in 2010 and 2011. In the downturn of the economy for the calendar year 2012, excavators were at -7.5 per cent over the previous year. Even in the future, we should expect a very healthy growth for excavators whenever the overall market for CE is in a growth phase.

Do you expect a negative impact on the earthmoving equipment market due to the slump in the Chinese market?
There is no direct correlation between the growth of Indian and Chinese CE markets, both move independent of each other. However, the Indian manufacturers always worry about the imports (dumping) of the Chinese equipment into India, whenever the China market slows down. We can certainly expect more of a presence of Chinese manufacturers in India, since a few of them have already established manufacturing facilities and marketing setups here. This type of presence will always remain, and Indian manufactures have to create their own strong points in the products and in marketing strategies to remain ahead of the Chinese companies present in India. We have to be wary of a price war emerging in an unhealthy manner, and the focus should remain on offering more value-added services to the customers rather than price discounting.

The presence of Chinese equipment always puts a price and margins pressure on Indian manufacturers. In case, however, the Indian manufacturers focus on value for money strategy with the customers, then each type of equipment will find its own place in the market. Even in China, there are three informal segments of price and product technology combinations. Similarly in India, we have to strongly resist the inclination to fall for a price war, as everyone including the customer will be a loser.

There seems to be a perception that repossession of new machines by the OEMs is on the rise. Is that true?
Sales and repurchase of used equipment has always existed in India although not at the same level as in the developed countries. We are finding that more organised players are entering this segment in India. This is a good trend, as it ensures a reliable certification process for the machines, and thereby, a greater transparency for the buyer. I feel that there will be more organised players in this area, and that will result in healthy growth for trading of used equipment. In the recent past, one has also observed the resale of relatively new equipment, which has happened due to sudden closure of work in a few states such as iron ore mining in Goa, as also setbacks for many hydro and road projects in the northeast, etc. This is an unfortunate happening, mainly due to a lack of support from the government for certain sectors and markets.

Brief us on the product range that Kobelco offers.
Kobelco has introduced the 20T category locally produced, and will shortly bring out other models, from the factory in Sri City, AP. We have always believed that high technology will ultimately become the top need for India, and therefore all the machines we manufacture in India or import and sell, adhere to standards by which Kobelco machines are made anywhere in the world. Our focus on the best fuel efficiency and faster machines remains steadfast.