[metaslider id=8539]Vinod-KVinod K. Dasari, Director, Leyland Deere

Ashok Leyland John Deere Construction Equipment Company Pvt. Ltd is a joint venture between Ashok Leyland, the flagship of Hinduja Group, and John Deere. It was formed in 2008 and the first commercial product, the 435 Backhoe Loader, was launched in November 2011, signalling the partnership’s foray into the Indian construction equipment space. Vinod K. Dasari, who is also Managing Director of Ashok Leyland, talks about the construction equipment sector in general and the backhoe loader market in particular. Interview by Sandeep Menezes.

What are some of Leyland Deere’s key achievements since launching its first product, the 435 Backhoe Loader, in November 2011?
Leyland Deere had launched 435 Backhoe Loader in the last quarter of 2011-12 with a major focus on large customers. We have sold close to 1,300 machines till date. In the last quarter of 2013-14 we launched 435E Backhoe Loader which is targeted for first-time buyers or first-time users. We intend to grow our presence in the backhoe market with these products for now.

The backhoe loader segment in India is very competitive with many global players vying for a market share. How does Leyland Deere compare?
In terms of mileage we are better than competition. We save half litre per hour of operation which translates into savings of Rs. 60,000 per year only on fuel. In terms of uptime we are at 90 per cent level due to durable parts. This level of uptime of our products is highest in the industry which translates into quicker return on investment.

Our revolutionary service offering CARE–I, which stands for lowest ‘Cost’ of operation delivering highest ‘Availability’ through most ‘Reliable’ products with ‘Easy’ to do business with Intelligent Product and Processes, reduces MTTR (Mean Time To Repair) to less than five hours. This ensures 20-25 per cent savings to the customers.

What are the growth prospects for the Indian construction equipment market?
The market for construction equipment has been one of the most severely impacted in the past two years. The new government, with its focus on infrastructure, will hopefully help restore some growth.

What do you think will be the main growth drivers?
National Highway expansion programme of four lane to six lane projects by NHAI, state highways development programmes and rural roads development programmes typically increase the demand for backhoe loaders. Agriculture land development and associated irrigation projects also provide momentum for growth in backhoe loader segment. We hope to see several projects start work in these areas, with a stable government in place.

Land development, building construction and industrial development projects will also add to backhoe loader utilisation. Blue metal quarries to support road construction, as well as reopening of the mining industry, will support the growth of demand for backhoe loaders, as the last mile material handling is economically managed with a fleet of backhoe loaders. Based on the various initiatives, we estimate that the backhoe loader market will grow at a rate of about 5 per cent to 10 per cent CAGR over the next few years.

What is the size of the backhoe loader segment in India?
The size of the backhoe loader segment is expected to be around 22,000 to 24,000 for the year 2014-15. Based on the various infrastructure development programmes and mining industry, the backhoe loader segment size could touch around 30,000 in 2016-17.

Interest rates have started softening though they remain high and most equipment sales happen through financing rather than self-purchase.
The impact of softening of interest rates has not yet been felt in the market. However, this could support the first-time buyers and first-time users segment with more and more operators becoming owners.

There is a shortage of equipment operators and technicians. How does your company handle this critical issue?
Leyland Deere already assists in training the new operators. Operators are trained on the operation of the backhoe loaders, product features and benefits, scheduled maintenance and daily checks in order to ensure that the operator and customers are aware of the product. As and when required, operators are also trained on the scheduled intervals and call centre activities to report product issues and take quick and appropriate actions to improve the uptime.

India is not governed by stringent equipment safety norms like those in the EU and USA. Going forward, do you feel that equipment safety norms need to be strengthened in India?
Yes, equipment safety norms should be strengthened in India with features like ROPS, FOPS Cab etc., on which regulatory bodies like ICEMA and ARAI work to improve safety norms. Leyland Deere is the only backhoe loader manufacturer in the country with ROPS (Roll Over Protective Structure) and FOPS (Falling Object Protection System) cabin. This provides operators the confidence to operate the machine and will enhance productivity.

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