Poor returns in India for Liebherr
Tower cranes struggle in price-driven market
Liebherr has yet to discover the ‘rewards’ in the price-sensitive Indian market.
German tower crane manufacturer Liebherr-Werk Biberach, part of Liebherr Group, is struggling to make in-roads into the Indian market, where it has a plant in Pune, which produces the 85 EC-B, a smaller-sized flat top tower crane.
Dominique Tasch, managing director of Liebherr-Werk Biberach, said that while emerging markets present a ‘risks and rewards’ proposition, Liebherr has yet to discover the ‘rewards’ in the price-sensitive Indian market. Tasch’ comments came at the International Tower Cranes conference in Berlin, organised by KHL Group.
Liebherr’s operatings in India have required a significant investment – including sending people in, investing in the manufacturing plant, learning the local regulations and talking with authorities. He believes the company’s experience, of rewards that have not yet materialised, has been shared by its Western competitors.
“We’re continuing to learn, and India is not just one market, its several markets in one country.”
“You think, when you see such numbers [of cranes sold each year in India], you will go into such a market and will get a big reward because you’re running a big risk, but we didn’t find that.”
The India market is developing very quickly, says Tasch, and it is hard for manufacturers to keep up with market demands, regarding crane size and capacities.
For the quality-oriented brand Liebherr, meeting the Indian market’s expectations for price has also been difficult. Buyers in India have a very low expectation for quality of a crane, said Tasch, including the cabin. “It’s difficult for us as a premium brand to fulfil those demands.”
The company will consider removing items such as a padded seat in the cabin to lower costs, but will not compromise on safety, he said.
Localised manufacturing has not provided a significant price advantage over manufacturing in Germany, due to the costs of establishing the plant and training staff, though it does provide a significant logistical advantage, this in a country where already it can take up to three weeks to deliver a crane to some areas.
“Nevertheless we owe it to our customers to not give up,” said Tasch. “We see a market that in the next 20-25 years will be one of the big three markets in the world.”
