Coming year, we are going to launch a couple of products in electric segment including a premium electric forklift, and a more efficient version of our stacker and battery-operated pallet truck. We are also planning to launch a new model of IC forklift, says MRV Johnson, Chief Marketing Officer, KION India. Excerpts from the interview...
How do you assess your journey since the JV KION?
Before the JV, Voltas Material Handling was a division of Voltas which is a part of highly reputed Tata Group. Material handling (MH) business only constituted a small portion of its total business and was not highly focused. After acquisition of MH business of Voltas by KION, we have widened our horizons and put up desired focus in product introduction and market share gain. Traditionally, Voltas was concentrating only on IC segment due to limited technical expertise in electric and warehousing segment. This was making business vulnerable to market cycles as IC segment is affected the most in a weak economy. To make our business resilient and to capture high growth in E & WH segment, we started working on enhancing our product range in E & WH segment. With the support of technical knowledge from other KION brands and leveraging the strong sales and service network of Voltas, we have reached double-digit market share in both these segments.
Will you be following the multibrand strategies here too?
Our strategy is to provide material handling solutions in all domains to meet the demands of customers. We are committed to maintain the highest standards and are dedicated towards continuous improvement to always be a step ahead in technology and making material handling problems, immaterial. KION India has set its eyes on becoming the No. 1 MHE provider sustainably, with a special focus on R&D with new product introductions lined up for the coming years. We are already selling trucks under the brands Voltas and Baoli in India. So, yes we are following the multi-brand strategy. In future, we may also introduce other KION brands under KION India umbrella.
What is the range offered by KION in India in these segments?
KION India currently manufactures and sells heavy-duty forklifts of capacity 8T to 16T. We have expected a growth potential of 10-12 per cent in this product segment during the next three years. We cater to the value segment (65 per cent of total Indian market) where we offer ´value for money´ products which are known for their reliability and low operating cost. We have the highest market share in India for IC forklifts.
The penetration level is still very low compared to global average. What do you think the major reasons that restrict the growth of MH market, especially forklifts?
Yes, the number of forklifts sold in India as a fraction of the population is very low when compared to the world average. This is due to a number of reasons, the biggest being slow pace of infrastructure development in the logistics field including rail, roads, ports and world-class logistics parks. Another major reason is the complex taxation structure which would possibly be taken care of by introduction of GST.
Also, the World Bank´s 2014 survey ranked India 134th among 189 economies in terms of ´Ease of Doing Business´. India ranked very low on factors like starting a business, dealing with construction permits, getting electricity, paying taxes and enforcing contracts. Government policies should be more business-friendly.
How do you look at the growth potential for forklifts from the hiring and leasing segment?
Many companies opt for hiring of MHE as they might require the equipment only for a short duration. Hiring becomes beneficial to customers who need to use equipment for specific projects with short timelines. This market is expected to grow slowly as companies can hire the required equipment according to exact requirements of the project along with contracted service, maintenance and operators making it cheaper and convenient.
What is product/technology trends in India compared to global markets?
Few years back, IC forklifts were most widely used but now electric forklifts have gained considerable market share too along with increase in demand of warehousing products like in most developed regions. LPG forklifts are not popular in India while they hold good market share in many regions of the world. Also, fleet management, hiring and leasing are in nascent stages in India.
There is no standardised structure or pricing mechanisms in the rental segment. What is your take on this?
Absolutely, there is no standardisation mainly in terms of pricing. Customers are dealt in different ways by different equipment lenders. For example, a customer is offered a used forklift on rent at the price of a new one and thenthe customer might not be satisfied with the performance. Finally, he may end up buying a new forklift and thus investing even more. Overall, there is less clarityand unless standardisation is achieved, customers would be reluctant to investing in hiring business.
Brief us on the value addition offered by KION India.
We provide a lot of features for specific needs such as customised attachments. For making the products user-friendly and safe, we provide techniques like height pre-selection, operator sensors, overload protection, travel speed control, lift speed controland others.
How far the prevailing slowdown has impacted the sales performance?
Material handling market went down by -1.6 per cent YoY from 2011-14 due to the slowdown. IC segment was affected the most. But, in the coming years, the market is expected to grow upto 10 per cent YoY due to boom in manufacturing industry because of factors like implementation of GST and improvement in infrastructure.
Brief us on the core strengths and competencies of KION India?
At KION India, we continuously evaluate the market and launch products to meet its ever changing requirements. Every KION India product is backed by dependable customer support during warranty and post warranty in terms of maintenance, spare parts and training. We have a qualified, trained and experienced field force of over 300 technicians located at 17 sales offices spread across the country to provide prompt and competent after sales support. Our product support team is reinforced by a country-wide network of 60 dealer outlets. To ensure the best possible quality in customer experience, the product support processes are managed by a specialised after-sales team at the sales head quarters in Pune to train, guide and support the large field force.
How do you assess bC India? Is there any new products launch on the anvil?
bC India is one of the best trade fairs in India and surely a great opportunity for exhibitors and visitors to come face to face. This exchange of thoughts will benefit customers in knowing the variety of products and finding out what suits their needs best while manufacturers can present their technology to customers and assess their competitors.
Coming year we are going to launch a couple of products in electric segment including a premium electric forklift, and a more efficient version of our stacker and battery operated pallet truck. We are also planning to launch a new model of IC forklift.