The fuel economy Kobelco offers continues to be a benchmark, and its technological innovations help the customer achieve higher production levels leading to substantial savings on one side and higher earnings on the other.
The construction equipment (CE) market largely reflects the state of our economy which continues to show signs of sub-optimal levels of growth. In recent months, we have seen some concerted effort on the part of the Centre to address critical issues in respect of various stalled infrastructure projects. However, it may take time before any positive outcome can be seen on the ground.
India has huge potential for infrastructure development and consequently, for a boom for CE but the actual pace of growth has been well below planned levels. To compound matters, many players had geared themselves for the enhanced demand and now have substantial idle capacities. Companies have to adopt innovative strategies to sustain themselves while keeping an eye on the coming boom, a lot depends on the post-2014 election scenario. A stable government which can take some tough decisions to propel the economy is what most of us are hoping for.
Demand-supply for excavator
Obviously, the demand-supply equation is tilted in favour of the buyers who not only have a wider choice but can negotiate a much better deal with any seller. Various construction activities are contributing to the demand for hydraulic excavators. Kobelco's 14 T and 20 T models are doing well in this segment mainly because of their better productivity.
The mining sector is also struggling to grow and many planned projects are on hold. Mining growth is largely a function of global demand and the current scenario is not very positive. Coal continues to be a major mining activity but the equipment is used mostly for overburden removal. Kobelco's share of this market segment is on the rise.
These are challenging times considering the unfavourable market dynamics. However, these compelling circumstances bring out the best in organisations which survive. Innovative strategies are developed to retain existing customers, value-additions and customer benefits are highlighted to increase the customer base. Referrals from satisfied customers are another major contributor to their sales effort. To ensure this, Kobelco continues to strengthen its product support network. Financial discipline has also been improved across the organisation to contain the liquidity challenges.
The government at the Centre, as well as in some states, have shown some positive intent but the impact is rather limited. Co-ordination between the various agencies/ministries has been a major issue leading to bottlenecks. The PMO has been active in resolving such issues and many clearances have been announced. However, this is yet to translate into real activity or progress on the ground.
Kobelco has always been focused on the customer's priorities and on delivering real value for money. The fuel economy Kobelco offers continues to be a benchmark, and its technological innovations help the customer achieve higher production levels leading to substantial savings on one side and higher earnings on the other. Enhancing machine durability and longer life of components is an ongoing effort at Kobelco. The company has also added remote monitoring of machine operation as a feature which allows customers to keep track of their machine utilisation from any location.
Kobelco has also started export of excavators from its India plant. This is possible because the company manufactures machines compliant with current international standards of operating efficiency, emission and safety. Kobelco is keen to augment this activity as it allows the company to utilise its plant capacity. In 2013, Kobelco upgraded all its models with newer versions to give customers better value for money. They also propose to market their bigger mining excavator in the 85T segment to widen their presence in mining applications. This machine is capable of setting new benchmarks in terms of fuel-efficiency and work output.
Kobelco has made substantial progress in developing local sources for various components. It had commenced local manufacturing with most popular 20T model in 2010 and has now added next popular model, in the 35T segment, for select applications like marble, granite, etc. However, it is quite challenging, as the company does not wish to allow any deviation in terms of quality. As per company sources, it is difficult to find reliable sources for vital components, as some of the major players continue to use older technologies and vendors have not moved to current international standards. There is an acute need for upgradation in this segment especially for hydraulic and electrical/electronic components.
Considering the overall business and economic environment, the priority is to allow end users to cut operating costs and improve productivity. Fuel economy continues to be one of the most important elements; operating efficiency and trouble-free operation are other vital considerations. Some high tech features like Geoscan, for remote monitoring, have been well received.
The demand for mini-excavators continues to rise in India. Kobelco has several offerings in this segment in Japan and many other developed countries. However, being a premium brand, with latest features, makes it quite expensive compared to locally available makes though the latter does not offer many of the features. This market segment is highly price-sensitive and customers are quite willing to accept a cheaper machine if it fulfills their basic requirement. Kobelco is expected to take a suitable decision at an appropriate time to cater to the growing segment of discerning customers.