The slowdown has helped us approach most of the rental companies. We have increased our footprint in services and reach, and we have initiated health checks for the machines. Hopefully, this initiative will help us get better business once things stabilise, says Rakesh Kumar, Head - Sales & Services AWP, India, Terex India. Excerpts of the interview.
To what extent has the slowdown impacted your performance?
It has impacted us a lot because we had more than 25 per cent growth in 2010 and 2011. Due to the slowdown, the number of enquiries has come down and so has the demand. The rupee depreciation has worsened the scenario as most machines are imported.
How do you manage the pressure?
We have been able to sustain ourselves and we are hopeful that by the second half of this year, things will be better. The feedback from our customers is that 2014 should bring some positive change.
What is the current demand for access equipment?
Right now, the demand is totally down, and the overall picture is not as we had expected a couple of years ago. At present, there are some requirements and we are catering to those. But on a whole, the demand is down and growth has not been there.
Is there any specific vertical that has helped drive the demand for access equipment?
The Metro projects have helped to an extent, but not in a big way. The real demand drivers are the rental segment and industrial sector but the slowdown has impacted the industrial sector; the manufacturing sector at times has even registered negative growth. Big manufacturing units were supposed to drive the demand but due to the slowdown, capital expenditure is put on hold. On the other hand, if the industry slows down, the rental rates also come down because of the demand and supply situation. Most of the rental machines are back in the stockyard. On a positive note, the forex is stabilising.
Has the slowdown given you a different focus in terms of networking or augmenting service capabilities?
Yes. It has helped us approach most of the rental companies. We have increased our footprint in services and reach. We have initiated health checks for the machines. Hopefully, this initiative will help us get better business once things stabilise. We are also in the process of adding more dealers in different segments.
How do you manage the financing part in the prevailing scenario?
We have our own financing arm which has come out with schemes to support customers to get soft loans, and we have created a good package with our financing team.
Currently, how many models do you have in India?
Genie was the first to start with many products in the access equipment segment. All models available in the world are available to our Indian customers. We have the entire range available for different applications whether it is the articulating boom, portable work platforms, telehandlers, aerial work platforms, scissor lifts, etc. Globally, we are launching a lot of new products. Recently, we launched the tallest boom that can reach up to 180 ft. It is under commercial production and will be available to Indian customers, too.
Have you added any specific service facilities?
We have our dealers who are the first point of contact in our business model. They have a set-up in all major cities and in Tier 2 cities also. Apart from that, we are building our own qualified service team. At the same time, we are also strong in spares, especially the availability of some critical parts at various locations in India. We will be further strengthening it. We want to add more parts. We will be opening a huge warehouse facility in Singapore soon. I am proud to say that all our customers are satisfied with our response and service set-up, our competency and capability.
Competition in access equipment is ever-increasing.
It will, always. With globalisation, there are four to six global players in India apart from a couple of domestic manufacturers and suppliers. A large market is necessary because there is space for everybody. The impact we feel is because of the slowdown. There is huge untapped potential for access equipment in India. Whoever will have better quality and service will survive. So far we are doing well.
But you are also facing tough competition from Chinese companies.
China is now tapping every single market but there is a difference in product and support. We have been here for the last eight years and have built a base. We have also a manufacturing set-up in China. So we have an advantage. Competition is there and you have to live with that, and you have to be proactive to meet competitive challenges. We have an edge on products and support.
Will you be looking to start a manufacturing facility in India?
Generally, Terex has a policy of going closer to the market. However, as of now, I don't think it is time to set up a manufacturing base here in India.
Do all other Terex verticals have their plants here in India?
We have our major base in the US with three factories and the fourth one under construction. We have a very big factory in China and some of the products manufactured there are sold in global markets.
How do you look at future growth prospects?
In India, the market for access equipment is really growing. In the last five years, the growth trend is quite impressive and there is huge potential. Given the fact that the amount of infrastructure we need to build is quite a bit, the huge opportunities in the industrial sector, coupled with increasing awareness on faster completion of projects without compromising on the safety of men and machine, the market for access equipment is poised for exponential growth. We are trying to tap this huge potential even though lack of awareness, absence of safety norms and over-dependency on the use of conventional scaffolding systems are all major hurdles.