Andrea Conchetto,
COO, Carraro Group
Q.How do you look at the market potential of 60 to 100 hp tractors in the design and manufacture of which Carraro is involved?
A.In recent years, the market for specialised tractors has grown. It is in contrast to that of the standard tractors. We estimate that this area will continue to grow and even though the short term growth rates affect the renewal of engines in Europe leading to a significant increase in vehicle prices. The incentive policies promoted at the local level by the respective governments will also be decisive.
Q.How do your Indian operations compare with manufacturing facilities across your other markets?
A.Our Indian plants have the fundamental characteristic of guaranteeing in a single system the coverage of almost all of our products. It amounts to a modern industrial platform, which is highly effective in terms of processing costs. It is equipped with the latest technologies and security systems. We consider this integration to be the main difference compared to the other plants of the Group that specialize in business lines and products.
Q.How do you look at the rapid economic changes taking place, and the coming of many disruptions as you seek growth?
A.Since 2009, nothing has been the same anymore. We are facing unstable equilibrium, especially about some geographical areas of the world. Moreover, some protectionist tendencies do not help the linear development of business. For our part, in recent years we have worked hard to streamline the organisational structure to lower the break-even point. We are therefore able to stay competitive despite the market conditions not being particularly favourable.
Q.How do you look at the segments that you operate in, in India?
A.In recent years, India has made great strides both in the agriculture sector and in the earthmoving equipment sector. There is still room for further development. In the agriculture equipment space, it is often the case that the government guarantees adequate subsidies to the population to continue the process of modernisation in terms of machines and equipment. The aim is to improve productivity of the agriculture sector and to ensure quality of life of the farmers. We see an opportunity there. In the field of earth moving, on the other hand, we expect the growth path at the infrastructural level to continue in every direction. Not only in terms of macro-investments in ports or airports, but also in the radical renewal in the viability between the main urban centers. We see an opportunity here as well.
Q.Opportunities yes, but are you sensing a slowdown in infra growth in India?
A.India is currently experiencing a fairly evident recessionary phase. On the other hand, it is also normal and following a positive cycle of continuous growth. While an evolutionary period of stagnation can be recorded, for us, the current situation is of negative impact on volumes in the agriculture as well as in the earth moving sectors. Our turnover has gone down to the 2017 levels. Given the excellent commercial relations with all the main Indian players in the sectors that we are in, we are confident of this phase resolving in the medium term. Also, the problem of the recessionary phase is not only specific to India. It is experienced world-wide. In India, the problem is more prominent due to the boom last year. We have been here for 20 years and we know that growth will return. One or two years may be bad. We will survive. We will invest in the faith that things will get back to normal. Speaking about protectionism, these are rather complex dynamics. They do not help linear business growth.