The KION Group recently made news when its Indian forklift truck brand, Voltas, announced joining forces with the long-established Italian brand OM in India. In this context, Sunil Gupta, CEO and Managing Director, KION India, elaborates about the company’s strategies and the way ahead.
The KION Group is a global leader in industrial trucks, related services and supply chain solutions with presence across more than 100 countries. KION Group is the largest manufacturer of industrial trucks in Europe, the second-largest producer of forklifts globally, and a leading provider of warehouse automation solutions. The company is represented in India by its four brands – Linde, STILL, Voltas and Baoli. Voltas has catered to the economy and value segment of the Indian material handling market and has been a dominant player through the years. Linde, STILL and Baoli are prominent import brands.
Linde and STILL are well-established in the premium segment while Baoli is a key player in the lower economy segment of the Indian MHE (material handling equipment) industry. The company’s customer-centric multi-brand strategy creates synergy among our brands, presenting an extensive product range and diversified solutions’ offering to our customers. A vast sales and service network with more than 100 touch points across India makes sure our products and services are within our customers’ reach. Excerpts from the interview:
What is the manufacturing infrastructure and capacities for KION’s Indian forklift brand Voltas?
We have a state-of-the-art production facility at Pune, which is well-prepared to address the long-term projected market growth. We have in-house production of IC forklifts ranging from 1.5 T to 16 T, E (electric) forklifts from 1.5 tonne to
3.5 tonne, stackers with mast height up to 6.5 metres, battery-operated pallet trucks, and reach trucks with mast height up to 11.5 metres.
What about industrial trucks? Are they too manufactured in India?
Yes, industrial trucks are manufactured in India. We have in-house production of IC and E forklift trucks at our Pune production facility. We are manufacturing industrial trucks for the Voltas brand as well as importing industrial trucks in case of sister brands Linde and Baoli.
How will the synergy with the Italian brand OM help strengthen KION’s presence in India?
The collaboration of Voltas with OM will strengthen the brand value of Voltas further. It will create more value for the customers by working on factors like reliability, ease of operation and robustness. Combining 100 years of OM’s technical know-how with 65 years of Voltas’ expertise in India will further help us effectively exploit synergies within the KION Group for the benefit of our Indian customers.
What is the current market and industry status of the forklift and industrial trucks segment in India?
The Indian MHE market has a huge potential to grow in the coming years. In 2016, the market witnessed a growth of around 8 per cent YOY basis. The material handling equipment market is highly competitive with the presence of many local and imported players offering varied solutions. There is high growth in the E forklift market due to a shift towards environment-friendly products. The WHE (weight handling equipment) market is growing rapidly due to increasing space crunch and a push for increased productivity and efficiency in segments like e-commerce. The combined share of E and WH segments is expected to grow by around 5-6 percentage points by 2020 eating into the share of the IC segment, which is currently around 40 per cent of the market. Currently, the market is witnessing a demand for cost-effective products with enhanced features. In spite of impediments, the market is attracting many new entrants. There is also an increase in the demand of imported products which we are addressing by our import brand Linde. We make effective use of brand synergy and collaboration within the KION Group to remain one step ahead of competition with the upcoming technologies in the industry.
Is growth expected in this segment? If so, what could be the triggers?
The market is expected to grow with 9-10 per cent CAGR in the coming years. The main growth driver is increase in industrial production followed by modernisation of logistics infrastructure. The government spending on the infrastructure segment and prudent steps to drive growth will increase the demand in coming years. The GST roll-out in 2017 is a very important factor for the industry as overall production cost will be reduced due to removal of cascading impact of multiple taxes. Increasing space crunch and growth of e-commerce is further driving the Indian MHE market growth.
How will the government’s Make in India and Smart Cities campaigns benefit your company in the long run?
The Make in India initiative leads to increased focus on manufacturing sector and boosts investment environment. It strengthens and smoothens the supply of local manufacturing equipment. The Smart Cities project will increase spending on modern infrastructure with a focus on increased efficiency which leads to increased demand for industrial trucks and warehousing equipment.
What are the company’s expansion plans for the coming 2-3 years? Is there a plan to make significant investments?
We have recently invested to expand our production facility at Pune to meet the demands of long-term market growth. We are continuously investing in R&D at Pune to be one step ahead of the market. We are also investing to further improve our product aesthetics by improvements in areas such as paint technology. KION India is passionate to grow and outpace the industrial truck and material handling industry. The company has more than 30 per cent market share in the Indian MHE market and aspires to increase it to more than 35 per cent by 2020.
Does the company work on customising its products for the
We are a customer-centric organisation and our R&D team at Pune is continuously working towards evolving our products and bringing future-ready products to provide value for money products to the customer. Our popular 3T automatic transmission IC truck is the only fully automated version among Indian manufacturers with single forward and single reverse speed selection. This feature increases operator efficiency and the ability to work for longer hours without fatigue. We recently launched an electric forklift with advanced twin motor drive technology providing very small turning radius.