Looking at the present market scenario, what would you advise for procurement of construction equipment? Buy it or rent it, why do you say so?
The government continues to place priority on building roads and bridges—allocating budget to build 35,000 km of road under phase one of the Bharatmala project, along with allocations for urban rail and airport expansion projects. The drive to improve infrastructure is leading to shrinking project timelines and placing pressure on contractors to procure equipment faster. To meet tighter project deadlines, contractors are placing priority on procuring highly reliable, fuel-efficient equipment with low total cost of ownership.

For contractors, it’s vital to know the predetermined cost of operating and maintaining a fleet throughout a project’s cycle, plus the resell value. Contractors are selecting road machinery from Volvo Construction Equipment for the low total cost of ownership and strong aftermarket support. We offer high quality and productive equipment that delivers the best levels of fuel efficiency in the industry. With Volvo CE, customers can do more with their equipment and downtime is minimised. Our lower fuel consumption improves cost efficiency and means work environments are cleaner. Overall, our customers can enjoy high levels of return on investment and the reassurance of dealing with one of the world’s very best industrial companies. Plus, Volvo has one of the largest and most experienced dealer networks in India, able to provide expert advice and support whenever it’s needed, and there are a range of Customer Service Agreements available.

The most comprehensive is the Gold Customer Support Agreement, and this option is increasingly popular in India as work levels rise and construction schedules are squeezed. It offers preventive maintenance, inspection and repairs carried out at the earliest opportunity by trained Volvo Service Technicians and gives companies the best possible peace of mind.

As infrastructure development in India moves into the 21st Century, construction operations are in the spotlight like never before. The fine margins on modern job sites mean that securing a small advantage in something as routine as equipment choice can translate into a big difference in profitability. With Volvo Construction Equipment, construction companies know they can take advantage of equipment with best-in-class productivity, and when support’s needed world-class backup is available.

Our company is well-known for delivering some of the most advanced designs in the industry, which results in leading levels of productivity. And equally important is reliability.

Another trend that’s emerging in equipment procurement is the move away from owning equipment to leasing. For smaller contractors, or those leasing from us for the first time we offer a range of attractive financing options through our Volvo Financial Services arm. For example, Volvo Financial Services offer attractive finance proposals, extended warranties.

What are the challenges you see are faced by the industry in dealing with liquidity crunch and what will be your suggestion to the buyers of construction equipment?
While cost remains one of the most important factors for buyers in India, the purchase price is only part of what constitutes a machine’s overall lifetime cost. Equipment owners and contractors in India have developed quite sophisticated models for calculating “cost per tonne” or “cost per km” for equipment, and this considers a range of factors, including purchase price, operating costs, productivity levels, anticipated maintenance, depreciation, resale value and more.

Volvo CE is heavily focused on productivity and lowering the cost of operations, or cost per tonne, for customers. A big contributor to this is fuel efficiency. It’s not unusual for a Volvo CE customer to report fuel savings of 10 per cent or more for one of our machines versus a competitor model.

Today, buyers in India are tracking costs carefully and are willing to invest in higher initial costs for reliable equipment that’s more productive, fuel efficient and can deliver value over the machine’s lifetime. Current purchase decisions evaluate “value” beyond the initial purchase price and look at additional benefits the machine brings over its lifetime, whether that’s maintenance services, response speed, parts availability, or financial and resell solutions. All these factors are influencing how customers evaluate value versus cost of procurement.

What is your company’s outlook for 2022?
The outlook to 2022 is still very bright. India’s potential is clear, and the drive to improve infrastructure and energy supply will unquestionably facilitate further growth in the economy and the construction equipment industry. As a company, Volvo CE has deep roots in India and an established sales and support network. We are well-positioned to play our own part in the next stage of India’s development and are excited to do so.

Looking ahead for the next five years, whatever the demands of the infrastructure or construction job, Volvo’s equipment offer the company’s hallmark qualities: industry-leading fuel efficiency and productivity levels that customers love the world over—particularly in India. Customers in India love Volvo machines so much because they can deliver the fuel savings they want but without the need to take on newer hybrid systems, instead utilising proven designs.

As infrastructure development in India moves into the 21st Century, construction operations are in the spotlight like never before. The fine margins on modern job sites mean that securing a small advantage in something as routine as equipment choice can translate into a big difference in profitability.
Dimitrov Krishnan, Vice President and Head, Volvo CE India