CASE Construction India, part of the CNH Industrial Group, is taking steps to localise more products in India. Satendra Tiwari, Director, Manufacturing, CNH Industrial India, told Mobility Outlook that skid steers are the next line of product that the company is looking to manufacture locally in the country.
“We have started work on building the first skid steer in India, and soon we will start a complete line for the same at our Pithampur, Madhya Pradesh facility,” he said.
CASE's skid steers sold in India are imported from various countries, including Brazil and America. Once this new line is set up, these skid steers will be exported to certain European countries.
Until now, Ukraine was the only European country where CASE India exported India-made products. However, after the Ukraine-Russia war, the company had to stop its exports.
Opportunity For Suppliers
Said to be the CASE's second-largest construction equipment facility in the world, the company's Pithampur plant has over 70% of its suppliers located within a 10 km radius of its location. Mobility Outlook learned that to localise more products, the company invites more suppliers to set base in the same industrial zone.
Shalabh Chaturvedi, India General Manager, CASE Construction Equipment India, said, “Majority of our products are more than 75% indigenous and are in line with the national initiatives like ‘Aatmanirbhar Bharat’ and ‘Make in India’. We are looking forward to catering to the increasing demand for construction equipment from this plant and are driven to design, produce, and provide machines that are beneficial to our customers to further the needs of the changing infrastructure in the country.”
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Interestingly, the first CASE skid steer being made in India is led by an all-women team, and the assembly line set up for the same is almost ready to be commissioned. The company is targeting to export skid steers from India before the end of this year.
In numbers, the company has over 300 suppliers in India, one of the highest among all its global manufacturing locations. “We are looking to increase that number. While this is an opportunity for new suppliers to work with us, this is also an opportunity for us to develop and localise more products in the country,” Chaturvedi said.
At present, the company supplies Made in India Backhoe Loaders, Excavators, and Compactors, to over 75 countries. As against the $19.5 billion consolidated revenue reported by CNH Industrial in 2021, it reported $23.6 billion revenue during 2022 (The company follows the calendar year as the financial year model).
Decreasing Logistics Cost
Tiwari shared that decreasing logistics costs is crucial in increasing import and export opportunities from India. Specific to the construction equipment industry, he said that the logistics cost has fallen by over 30% to 40% during the last few months.
“Both import and export logistics costs have fallen. This allows us to import components not made in India currently, value-add, and export more construction machinery from the country,” he said.
Increased focus on R&D, availability of new materials to experiment with, and a better ecosystem for the construction equipment vertical are additional factors that are helping the industry's growth.
For India, Tiwari feels that the next few years will be all about growth as the Central Government has announced many infrastructure development projects. These factors will aid the demand for construction equipment, mixed with infrastructure projects from the private sector.
As for the added cost in manufacturing owing to the increase in electronics and software, Tiwari feels that the consumer would not mind paying for these as these benefits outweigh the increased cost. “Though there is a slight increase in the CAPEX for acquiring construction equipment, features like telematics are helping consumers decrease their downtime,” he concluded.
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