Ashok Leyland, US company John Deere enter into joint venture to retail construction equipment

Chennai: Hinduja Group flagship Ashok Leyland has entered the construction equipment business, along with American company John Deere, with the launch of the 435 backhoe loader. Priced at Rs 23.5 lakh (ex-Tamil Nadu), the backhoe loader is the first product to roll out of the 50:50 joint venture, Ashok Leyland John Deere Construction Equipment Company. “The joint venture marks a marriage of experience with expertise, global vision with local relevance. The backhoe loader has been designed for the Indian market conditions and the requirements of Indian customers,” said Dr V. Sumantran, Chairman of the joint venture company. Around Rs 200 crore has been invested in the first phase of the 435 backhoe loader. Branding The product will be sold under the ‘Leyland Deere' branding and manufactured at a Greenfield facility in Gummidipoondi, near Chennai. It addresses the critical considerations of lower operating cost, fuel economy and low maintenance and repair costs, said Mr Douglas Meyer, Director – Construction and Engineering, John Deere. The 435 is powered by an Ashok Leyland engine from the H-series platform and promises features such as power shift transmission, large cabin space, higher visibility, higher breakout forces and greater dig depths. The product will be initially launched in the southern states, before being rolled out nationally. The company has tied up with partners such as TVS Logistics for distribution. “For now we will focus only on the domestic market,” said Dr Sumantran. Two more products are being developed by the joint venture company. The second product from the joint venture – a wheel loader – will be rolled out in 2013. Mr P. Ravi Shankar, CEO, Ashok Leyland John Deere Construction Equipment Company said the company is looking at a capacity of 10,000 units by 2016-17, across the three product categories – the backhoe will account for 8800 units. The backhoe category in the country is at 20,000 units a year, growing at 30-35 per cent. JCB is the market leader in this segment with a 75 per cent share.