Heavy vehicles major Ashok Leyland, the flagship company of the Hinduja Group, and US-based agriculture machinery maker John Deere on Tuesday announced entry into the Indian construction equipment business with the launch of earth mover 435 Backhoe Loader.
The product is the first out of the 50:50 joint venture between the two companies, almost three years after they forged the partnership.
Going forward, the company feels infrastructure in India needs a 1 trillion dollar investment and Ashok Leyland wants to make the most of it.
In an interview with CNBC TV 18, V Sumantran, chairman, Ashok Leyland-John Deere JV said, “Construction equipment market is growing between 20-25% if you look at the aggregate of the last few years".
"While John Deere brings in their advanced technical knowhow and vast experience in global construction equipment space, Ashok Leyland would lend its in-depth knowledge of the Indian market, proven expertise in manufacturing, sourcing and distribution," said Sumantran.
He said that despite the present global economic slowdown, "in the next three to four decades, the amount of growth in India is not to be questioned".
The 435 Backhoe Loader had been made to satisfy the unique needs of Indian consumers, Ravishankar, CEO of Ashok Leyland John Deere Construction Equipment Company, said.
"Indian equipment owners place more importance on operating and owning cost and endurability," he said, adding the product would be reflective of these concerns.
The backhoe loader, manufactured in Ashok Leyland's plant in Gummidipoondi near Chennai, would also have more cabin space for the operator and better safety features, he said.
Sumantran said at least two more products, including a wheel loader, of the JV were in the offing in the future, and added the company's teams were working on them.
The wheel loader could be launched some time in 2013.
Though a standard price for the 435 Backhoe Loader was not available owing to the different tax structures in many parts of the country, the price of the product in Tamil Nadu was announced as Rs 23.59 lakh.
Watch video:See huge potential in construction gear mkt: Ashok Leyland