EC Manohar, District Manager, and Andy Dhanaraj, Director-Sales, Caterpillar India, share more on the equipment and solutions offered by Caterpillar for its customers.
Current market scenario: The numbers over the last 6-7 months show that the industry is booming. In fact, India is the only bright spot today and the world is focused on it. I think there is an enormous opportunity for CE per se and I think the future is good for the next 5-10 years.
Product lines in demand: The road segment has picked up and other initiatives by the government like smart cities and inland water projects are providing significant opportunities as well. I firmly believe that the excavators of 20-30 tonne class and motor graders like 120K have opportunities in this scenario.
Change in customer expectations: From what they were 15 years back they are quite different now. Technology is playing a significant role. For example, 10 years back when we introduced the Accugrade technology there were no takers. However, today the interest is there and they want efficiency and speed. They are much more knowledgeable because of internet and they expect us to provide all such solutions.
Buying a total solution: From Caterpillar standpoint, we have not been selling machines.
Of course, there will be a content of equipment price but we always look at solutions of what we can do to make it more efficient for the customers and we can make it more profitable for the customers. That is the key of the story and I think we are delivering the same. As you can see in our stall, the major focus has been on technology, both from machine and product support standpoints.
Equipment for asphalt roads: I think the significant push in India will remain on asphalt or black top roads. With the kind of targets the government is setting for all the contractors (45-65 km per day), this velocity of road construction is possible by making asphalt roads for which we have the required infrastructure. As such, the asphalt segment will be still alive. For most part of national highways, the raw material will still continue to be asphalt while we will see a lot of white top in state highways, municipal roads within the cities. For having 8-lanes asphalt will be the primary mode of road building in the country.
Generation next for Caterpillar: What we have done in this country so far for top layers is that we bring the equipment that can do roads. Next step in the country and for Caterpillar will be how to make the decisions smart, make the machines work better, work faster and the customers can make more money or profits from the machine. We want our customers to see world-class value in the roads being built by our machines. That is what we are envisioning for ourselves. We do not want to just build roads. We want the roads to last longer and be world class; bump-free and the suspension of the cars should not move more than 5-6 mm. Caterpillar is fully equipped with technology to enable that.
Technology adoption at affordable costs: Technology adoption by customers so far has been not so good. Many of our customers today do not fully understand the value of the particular technology used on the machine. Even though it is inbuilt, they do not adapt the same quickly. Since the government has cleared many hurdles for the contractors and set daily targets of road construction over the past one year, the change will come from the customers who will need to work faster and in turn make use of the technology provided in our machines.
Monetary policy and GST regulations: As a country, we are leaping to a next step altogether. For us as an industry, it should not affect much. However, the more one thinks about it, a lot of money has flown back into the banking system, which would mean that banks will have to improve their lending process. They will have to give more loans at cheaper rates which will create more jobs. That means our business will evolve. In terms of GST, it does have a lot of advantages, especially for companies like Caterpillar. We will have a very clear transparent course of shipping our inventory of machines through our dealers and they in turn will benefit a lot from GST. Today we have 28 markets in one country and GST will open up one market for the industry and we can have many stocking points without any problems of tax, reduced paper work, improved efficiency are some of the benefits we will get from GST. Hopefully by September it will be in place.
Focus north-east: North East is well in the focus of our dealers for last several years. TIPL has made large investments in this region. They have opened new shops, found new partners and customers who can work with us. Having said that, our machines are built for all terrain conditions. There may be some additions to our portfolio related to the space in which they need to work. We have plans to introduce machines which work in short radius. Nevertheless, we already have customers working in this region who are not actually from that region but have been supported by TIPL. All in all, we are very strong in this region not only in terms of machines, but in product support as well.