Excon 2022 FAQ - 1
Globally, we are facing a price hike that is the highest it has been since the past 7 years. As the Indian rupee loses value, inflation soars higher than ever, crude oil prices have also skyrocketed, causing an adverse effect on the Indian economy. Most of our operating costs include fuel costs, and this inadvertently affects the prices of other commodities. The hike has definitely impacted the day to day running and we are facing a constant increase in our input costs. We have had to take measures to offset this price hike that we are facing by revising our prices as well. But even so, keeping the customer in mind as always, this is just a minimal increase, with a guarantee of quality in all our products. Our equipment is the best in class fuel efficiency and it always yields the highest productivity per litre.
We see 2 main ways that fuel price rising will affect the construction equipment industry:
1) Manufacturing: Almost all of the construction equipment machinery and vehicles require diesel to function. The costs to keep construction machinery running are constantly increasing because of the hike in fuel and crude oil prices. Not only this, but a hike in fuel prices also affects other commodities such as aluminium, palladium, petroleum based asphalt etc which are vital to manufacturing construction equipment. Manufacturing these machines and vehicles is going to be more expensive than it was. This will impact commercial, residential, national, real estate projects on a large scale.
2) Consumers: Customers and clients will have to assess their decisions to purchase construction equipment more harshly because of the increasing prices, and subsequent inflation. This will greatly affect purchasing power. Not only because the purchasing prices have increased, but also due to the increase in operating costs of the machines.
However, we at Mahindra CE continuously strive to create machinery that is easy on the pocket in terms of maintenance costs. The Mahindra standard is to create construction equipment that is made for Indian terrain, using AI technology and intelligent telematics solutions to process data to work smarter, harder and faster. We are extremely proud to say that Mahindra Construction equipment is the best in class fuel efficiency. We understand that our customers need a one stop shop and a guarantee that they will expect returns when investing in construction machinery, which is why our range provides the highest productivity per litre.
We have had to adapt and improvise in the current political and economic climate since our input costs continue to increase. Yes, the price rises are affecting our customers, but in order to adapt we have minimally revised our prices to maintain stability in manufacturing and selling. Our company only works on the trust we have built, and the good reputation and relationships we have established with our clients and our vendors.
However, we do have solutions for our customers in order for them to save and get the most out of our range of products:
Tie ups: We work in collaboration with different financial institutions and work with them in order to help our esteemed clients purchase our construction equipment and machinery at reasonable rates. We have set up Mahindra Finance, which offers financial solutions and advice for a plethora of products. Everything from construction equipment to passenger vehicles, pre-owned vehicles to SMEs. We cater to the underserved customers in rural areas as well as larger clients in cities and urban areas, providing financial services that are carefully created for each one’s specific needs. Be it personal loans, mutual fund distributions, bill discounting services, etc.
Rent: A more economical and efficient way of saving is renting. This is a fairly nascent concept, but picking up pace fast because it allows you to retain the construction vehicles or machinery that you may require for your specific project and time period, at a much lower rate than purchasing. The costs for renting equipment have not been revised either and they stay the same.