Leyland-Deere to Enter Wheel-Loader Segment in 2013


Construction equipment manufacturer Ashok Leyland John Deere Construction Equipment Company Pvt Ltd plans to enter the wheel-loader segment in 2013 after the launch of its backhoe loader Tuesday, a top company official said.

"Our plan is to have three products in our portfolio. The second product will be wheel-loaders and the third will be announced later as teams are working on that," said V. Sumantran, chairman of the company and executive vice chairman of Hinduja Automotive Ltd.

Ashok Leyland John Deere Construction is an equal joint venture between Hinduja group's Ashok Leyland Ltd and the US agricultural and construction equipment major John Deere.

Sumantran told reporters here that Rs.200 crore has gone into the 10,000 units per annum plant located at Gummidipoondi near here.

Ashok Leyland John Deere's first product -- Leyland Deere backhoe loader -- is priced at around Rs.2.35 million and will take on competition like JCB, Caterpillar, BEML and others.

According to officials, the maintenance cost of Leyland Deere vehicle will be low as compared to that of the competition and cited the low hydraulic oil - around 40 litres compared to 120 litres of a leading brand - as an example.

Sumantran said there are a lot of synergies between Ashok Leyland and John Deere which resulted in the joint venture.

He said the backhoe loader will be powered by Ashok Leyland-made engine and the local content in the vehicle is very high.

"The hydraulic cylinders are also sourced locally and there is very little import content in the vehicle," Sumantran added.

Queried about the group's foray into tractor segment, he said: "Over the past four or five years the Hinduja group has taken a deliberate growth strategy and construction equipment business is a logical one. We want to be in mobility-related solution business."

P. Ravishankar, CEO at Ashok Leyland John Deere, said about the backhoe loader market in India: "The industry is growing around 35-45 percent per annum. This year, the total sales are expected to be around 28,000 units for the industry."

Sumantran said: "Over the next few decades, the markets in India and China are set to grow. There will be temporary dips but overall there will be growth."

According to Ravishankar, the company will initially launch its products in the southern markets and later go national. "In the first phase, there will be 12 major dealers in south," he said.


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