Our core strength lies in manufacturing
We have come out with Phase I with the launch of three products. Phase II, basically excavators, will be launched looking at the market trends. Beyond that it is going to be the cranes. This is how our company is going to proceed, says Asif A Dalwai, Chief Executive Officer, DNS Automotive. Excerpts of the interview.

Given the kind of market conditions, competition and its intensity, the product range you have come up with is impressive. Brief us on your core strength and competencies.
Our core strength lies definitely in manufacturing. DNS has evolved out of our manufacturing capabilities. As a group, today we have 13 manufacturing plants in India for products meant for various verticals. We are well-spread all over India. We have plants in Pune, Bhopal, Indore, Rudrapur, Haridwar, Dharwad, Chennai and Jamshedpur. Our strength is in cabin building, body works, axles, exhaust, aluminium etc. We ventured into Windals Power which manufactures gensets. Our flagship manufacturing company is Windals Auto.

How did you get into the CE market that too in a period when the whole industry is down?
It is just a logical extension of getting into this line and as I have mentioned, we have such strong inbuilt capabilities in manufacturing. We have forayed into the construction equipment space with the launch of wheel loaders from 3T to 7T and motor graders and I am proud to say bulldozers because that is the space we are going to dominate.

Aren't there already well-known companies manufacturing these products in India?
Yes, there are a couple of companies who have manufacturing set up for motor graders such as LeeBoy and BEML. Definitely there are players who manufacture wheel loaders in India like CASE, JCB etc. I was talking more of grader and the bulldozer. That is where we have a good space for manufacturing in India. On the other hand, we will be able to leverage on our strengths of availability of quality and original spares made locally and after-sales service all of which are a concern to the customer. So, I am quite confident that we will be able to make an impact in this space.

Will the entire product range be localised?
Yes, to a great extent. After six to seven months, we will be able to localise 70 per cent of the content - already our protos or assemblies have begun in India. Till that time we are going to import the machines, but spares are already available here. In a years' time, the key aggregates will be imported, all the rest will be localised.

Do you mean engines?
Yes, majorly engines. Because we have developed competency in axles in India and transmissions is also not a problem. We have taken care of that and also the spares availability is already here. Our major focus is not selling a standard machine; rather our core focus is on application-based solutions. In a nutshell, we are not going to become an Apple of the industry. We are happy to become an Android of the industry.

Can you elaborate a bit?
Today is the time for application-based solutions. I see a big market developing for that because the market has to evolve. If the customer sees a value addition attached, there is a scope for sale. I am very glad to say that for the next three months I am booked with orders. I am getting my trial orders. I am getting all these because of the value add ons that I am giving to my customers and I think that is going to be the success of our entire portfolio.

You said you are now importing the machine. Is the whole machine available through any joint venture?
Yes, it is a joint venture. The core technology is from Japan and the machines are from China. It is just a temporary arrangement for the next six to seven months after which all these machines will be made in India.

What has been the investment so far?
We have already invested close to Rs 35 crore and we are going to invest further as the product gets matured here in India.

Has the plant already been set up?
We have many plants in the country and we have started with the production in Pune. So the plant is already up and our assembly work has already started. I will be more than happy to take any of my customers or you guys to visit that plant also.

As of now, we have three bases made for three different lines. Since we are already into mass production for our other aggregates, it is very easy manoeuvering from products A to B. We are into vehicle integration in a big way. So for us this manufacturing is not a new thing. We are a new entrant in the CE space, but we have a rich track record in manufacturing.

Are the products already in the market now?
Yes, our loaders are already there in the market. Already 400 machines, which include wheel loaders and bulldozers, are working in India. The loader market is now getting matured in India.

Though the market is dominated by backhoe loaders, wheel loaders will also get a good share of the market. But as the end-user understands the advantages of wheel loaders over backhoe loader, especially based on application-based advantages, there will be a gradual shift towards wheel loaders. Today, 3T class is fast moving, but there is a gradual shift towards 5T and 7T wheel loaders and we have the whole range with us.

What is the range in motor graders?
In motor graders we have 135 HP and 165 HP.

What is the market for bulldozers?
It depends on how it evolves. We see that the bulldozer availability and the bulldozer market are still to evolve. There is a market and it will grow.

What is your vision for the future?
Beyond the range of products that we have already launched, we will be widening our portfolio. We will be launching crawler excavators, followed by mobile cranes. In the excavators segment our focus will be on 6T to 21T class. Our core strength lies in what our tag line says ?Japanese technology manufactured in India'. Our focus and core strength is going to be manufacturing these products in India suited to the Indian operating conditions.

It is something admirable to anticipate.
We have come out with Phase I with the launch of three products. After these three products, it is going to the excavator line and beyond that it is going to be the cranes. This is how our company is going to proceed.

Is there any time frame for the Phase II to commence?
We are looking at eight to nine months from now because that is the time we see the market developing. Based on this, our plan is that by the end of 2014, our second phase should start. But again I would say that it will depend upon the market scenario also. I am not one of those people who is market-specific or market-driven. I follow a writing by Ratan Tata, ?I do not take the right decisions, I take decisions and make them right?. So markets will have its ups and downs but you have to find your own way in this market. It will not deter our determination to get into the second phase but we will see how the market develops. More or less it looks like in 2014, we will start our second phase.

Tell us about your dealer network.
We are trying to enhance our servicing and network capabilities. Right now, we are strong in the western and southern regions. In the north and east, we are expanding our base. In fact, in our manufacturing side, we are starting from Pune but in future we may start from our Rudrapur facility also. Southern region will be taken care of by the Pune facility and the North and west will be taken care of by our Rudrapur facility.

Where do you position your product in the market?
I would say as of now it is on the medium level and we will be striving for it to be between the medium and the premium level. I would definitely not say it is on the lower level because it is not.