the flagship of the Hinduja Group,
and John Deere announced their entry into the
rapidly growing Indian construction equipment
business through their 50:50 joint venture, with the
launch of their first product, the 435 Backhoe
Loader. Ravi Shankar
, CEO - Ashok Leyland John
Deere Construction Equipment Co Pvt Ltd told
that as the Indian economy grows,
there will be an increasing shift from manual
labour to mechanized solutions thereby ensuring
demand for construction equipment.
Recently Ashok Leyland and John Deere announced their joint
venture and entry into the Indian construction equipment industry.
How has it helped your business? How is this JV helping the
company's construction equipment business to grow?
There are a lot of synergies between Ashok Leyland and John Deere which
resulted in the joint venture. More so for Ashok Leyland, because the
company is already present in the mining and construction segment with its
tipper range and the foray into the construction equipment space will enable
us to provide end-to-end mobility-related solutions to our customers.
John Deere brings in advanced technical know-how and vast experience
in the global construction equipment space while Ashok Leyland lends indepth
knowledge of the Indian market with proven expertise in
manufacturing, sourcing and distribution to this strategic partnership.
With this, we are well placed to jointly offer customers products that will
make them more profitable in their business.
Please give us a brief on your products marketed under the brand
Currently, the first product from the joint venture, 435 Backhoe Loader
(BHL) is being marketed under the brand - Leyland Deere. The product has
been designed and engineered specifically for Indian operating conditions
and keeping in mind user-habits in India. It addresses the critical customer
requirements of lower operating cost, higher productivity and greater
reliability. A strong and rugged structure ensures performance in all
conditions and climates. It is powered by the proven 'H' Series BS III
compliant engine from Ashok Leyland with a mechanical fuel injection pump
for overcoming the problems of varying fuel quality while power shift
transmission, power-assisted hydraulic brakes and SAHR parking brakes
ensure easy and fatigue-free handling over long hours of operation. Could you please tell us about your manufacturing facilities and
The 435 BHL is being manufactured at LEYLAND DEERE's brand new
facility at Gummdipoondi, 50 kms from Chennai. This facility incorporates
globally-benchmarked manufacturing facility like robotic welding, CNC
machining, state-of-the-art paint shop to ensure the highest standards of
product reliability and durability, supported by international standard
quality processes and systems. Our manufacturing facilities also reflect
our firm commitment to be environment-friendly and are incorporated with
the latest environmental standards for recycling, recovery of material and
many other initiatives.
Please throw some light on your company's technological
leadership and market presence in this sector? What will be your
focus area going forward?
Leyland Deere 435 Backhoe Loader has been designed and engineered
specifically for Indian operating conditions with a deep focus on userhabits
in India. One of the chief reasons for the rapidly growing demand in
the market for our product is its competitive advantage in satisfying the
critical customer requirements of lower operating cost, higher productivity
and higher up-time.
Leyland Deere 435 Backhoe Loader has multiple features which give
competitive advantages such as rugged & fuel-efficient engine from
Ashok Leyland with mechanical inline fuel injection pump,
luxurious best-in-class cabin, and enhanced safety
features like ROPS and FOPS, heavy-duty drivelines with
longer change intervals for lubricants.
To ensure higher uptime in the industry, our customers are
supported by the innovative Leyland Deere C.A.R.E
through an extensive and
efficient channel network.
We are extremely
confident that our
support programme along with the superior productivity and reliability of
our product will make "Leyland Deere" a trusted brand across the country.
How has been growth of the industry in past few years? What is
the growth potential of Indian construction equipment industry in
the next five years? Tell us about the growth drivers for the
In an emerging economy such as ours, economic growth is highly
dependent on investments in the country's infrastructure. To ensure the
GDP growth year after year, the Indian government has now enhanced
the focus on infrastructure projects, as evident from the 12th Five Year
plan. The Indian government has been increasing the infrastructure
investment target by 100% in the last three five year plans. The current
target of $1 trillion in the 2012-17 period will greatly enhance the market
for Construction Equipment. The investment spend on Construction
Equipment was at around 3-3.5% during the 10th Five Year plan
which rose to around 4-4.5% during the 11th five year plan. As the
government has now focused efforts on escalating
productivity and adherence to timelines in the
infrastructure projects, in the 12th plan
we expect the investment
spend on Construction Equipment to rise to around 5-5.5% which would be spread over the next
five years. Overall, we expect the Construction Equipment industry to
grow by 13-15% CAGR in the next 5 years.
The equipment rental business in India is only less than 10 % of the
total construction equipment industry, which is nowhere close to the
rental business in the developed markets. What is the reason for this
and how this situation can be tackled?
In the Indian rental equipment market, the unorganized sector is dominant
while the organized sector currently only occupies a relatively smaller part
of the market.
The unorganized rental sector largely comprises of the markets for
smaller construction equipment such as Backhoe loaders and mobile
cranes while the major part of the organized rental sector is made of the
markets for large equipments such as Excavators and concrete mixers.
We expect that as the Indian economy grows, there will be an increasing
shift from manual labour to mechanized solutions. This shift will be majorly
driven by the demands for increases in productivity by the growth in
private investors in construction projects in the coming years. With such a
shift, the demand for construction equipment will grow and broaden the
share of the organized rental equipment market thus increasing the
overall share of the equipment rental business in India.
Ashok Leyland, the flagship of the Hinduja
Group, and John Deere announced their
entry into the rapidly growing Indian
construction equipment business through their
50:50 joint venture, with the launch of their first
product, the 435 Backhoe Loader. The products
will be marketed under the brand LEYLAND
DEERE. The new brand symbolizes the coming
together of two strong partners, each bringing to
the association their unique individual strengths
and competencies. John Deere brings in their
advanced technical knowhow and vast
experience in the global construction equipment
space while Ashok Leyland lends in-depth
knowledge of the Indian market, proven
expertise in manufacturing, sourcing and
distribution, to this strategic partnership.
Dr. V. Sumantran, Chairman, Ashok Leyland
John Deere Construction Equipment Company
Ltd. and Executive Vice-Chairman, Hinduja
Automotive Ltd said that this JV marks a
marriage of experience with expertise, global
vision with local relevance, technological
leadership with market presence. "While we seek
to redefine the benchmarks with our first
offering, we are well on our way to both extending
our range with additional products as well as
scaling up our operations beyond this start."
The first product from this combine - the
LEYLAND DEERE435 Backhoe Loader (BHL) -
has been designed to transform the nature of
the construction equipment business in India
as well as re-define the way construction
equipment products are perceived and used.
Exceptionally well-engineered and featurerich,
the 435 BHL will deliver superior value to
the ever-evolving construction equipment
customer by addressing the critical
considerations of lower operating cost, higher
productivity and greater uptime.It is rugged in
structure, powered by an Ashok Leyland engine
of proven pedigree from the 'H'-Series platform
and replete with USPs like power shift
transmission, best in class cabin with larger
space and higher visibility, higher breakout
forces and greater dig depths.
Michael J. Mack, President, Worldwide
Construction and Forestry Division, Deere &
Co.said that their first product represents a
triumph for the joint venture in terms of
collaborative development. "We have used our
intimate knowledge of ground realities and
specific customer requirements as touch stones
while engineering the product which, we believe,
will be well-accepted in the Indian market. The
single-minded focus, constancy of purpose and
perfect understanding between the partners has
held the joint venture in good stead and positions
us well for the exciting journey ahead."
To ensure that customers get higher uptime, the
LEYLAND DEERE 435 BHL will be supported by
an innovative customer care package called the
C.A.R.E. Programme which will be delivered
through the efficient LEYLAND DEERE channel
network developed. The C.A.R.E. Programme
will include an extended warranty of a year after
the 1st year of warranty, committed restoration
time for the equipment and regular and periodic
engineer visits to the customer during warranty
period and also an insurance cover of Rs. 2
lakhs for the customer's operator.
The 435 BHL is being manufactured at LEYLAND
DEERE's brand new facility at Gummdipoondi,
50 kms from Chennai. This facility incorporates
processes like robotic welding, CNC cutting,
state-of-the-art paint shop to ensure the highest
standards of product reliability and durability
supported by international standard quality
processes and systems.