The Big Interview: CNH's Hakan İlhan
Hakan İlhan says smart engineering is driving their growth strategy
FIAT Industrial, the manufacturer of Case Construction and New Holland, is one of the largest capital goods manufacturers in the world. CNH’s director of marketing for Middle East and Turkey, Hakan İlhan, explains why smart engineering is driving their growth strategy in the Middle East
With revenues in 2012 of $35.4 billion, (a 6.2% increase from 2011), Fiat Industrial is one of the largest capital goods manufacturers in the world.
Including CNH (with the Case Construction and New Holland machinery brands), Iveco trucks and engine manufacturer Fiat Powerline Technologies (FPT), the manufacturer boasts a strong portfolio of machines and heavy vehicles.
Recently Fiat announced a number of changes at a strategic level, which saw it reorganise its business, with Europe, Middle East, Africa (EMEA) created as a sales region.
It is also unwinding its joint ownership and equity participations with Kobelco, and eliminating any geographical exclusivity rights associated with their agreements, though some cooperation will continue including sourcing OEM parts.
The first thing you learn about Hakan İlhan, director of marketing for Case Construction and New Holland in the Middle East and Turkey, is that he’s willing to put any machine in his range up against a competitor’s.
“Let them come,” he says. “Whether it’s wheel loaders, graders, dozers or skid steers, we will take on any comers – and beat them.”
We’re riding in the back seat on the way to a meeting with financiers in Muscat, Oman, part of İlhan’s busy schedule visiting dealers in the GCC.
Along with CNH marketing manager M. Anil Tanca and New Holland business manager Dragan Krznaric, they’re organising a series of customer days with their dealers across the region, including International Heavy Equipment in Muscat, Nass Commercial in Bahrain, United Al Saqer Group in Abu Dhabi, Arabian Auto Agency in Dammam, and the opening of the new Roots branch in Riyadh. That’s on top of a series of training seminars carried out with their dealers at the beginning of the year.
İlhan wants to see stronger market share for the two brands in the Middle East, saying that the quality of the product – the level of engineering – warrants it.
“We want to make sure that our power, our R&D and production capabilities, and the products that come out of it, are well-represented in the Middle East region, and our market share truly reflects what our equipment deserves.
“Clearly after Caterpillar and Volvo Group we are the third biggest supplier of capital goods in the world.”
Case and New Holland also deserve recognition due to the range of machines they manufacture, says İlhan.
“There are few full liner companies in the market for construction equipment.”
The ‘full liner’ range includes 1.5t-45t-80t excavators, 300HP wheel loaders up to 350HP dozers, and up to 120-130HP graders.
History is on their side as well, and the Case brand is 170 years old.
With its engine manufacturer FPT producing approximately 3.7 million engines a year, 70% of which are absorbed within Fiat Industrial, CNH is also one of the few global manufacturers of construction machinery to build its own engines in-house.
This, says İlhan, leads to better-engineered machines.
“When you have the engine development in your hands, you align the transmissions. You can then also engineer the pumps and hydraulic valve controls, and the cylinder sizes, which then make the machine more efficient.
“We are not just another market brand. Even the positioning of the engine, or the way that we lay out certain components, is to drive ease of serviceability and increase performance.”
The benefits of engine positioning are seen in the Case 721f, 821f and 921f wheel loaders launched last year, which feature the engine at the extreme rear of the machine, with the radiator and coolant system placed between the engine block and the cab.
Not only does this result in improved cooling and a more comfortable ride, the engine acts as a counterbalance, lowering the overall machine weight.
“On a wheel loader to our process competitors in the same performance class we are approximately 2-2.5 tonnes lighter,” explains İlhan. For operators, this means better manoeuvrability on the job site; for business owners, lower running costs, including fuel and various wear parts such as brake discs.
From his dealers in the Middle East, İlhan has high expectations. Salesmen should be conversant with the products’ DNA, willing and able to explain to customers the value high engineering will bring to their business.
“The cost per tonne is lower. For the knowledgeable contractor who cares about those calculations, and the standards and values, in our graders, in our production machines like the dozers, wheel loaders and excavators – the cycle times are faster, the machines are lighter, the engine is so much more efficient.”
Heavy capital investment in Case and New Holland has seen nearly 100% of the product range has been updated in the past two years.
“It’s not just another backhoe. We are not producing just another skid steer. There are so many specific engineering features that have benefits for the customer,” says İlhan.
In his quest to build market share, İlhan is aided by the recent top level changes within the Fiat Industrial group, which will see more resources dedicated to the Middle East and to Africa.
“Rather than having a commercial organisation looking after many markets, the focus is more on strong country and regional management. Local support will be stronger.”
Nevertheless, it is the performance of Case and New Holland which will win and retain customers. Perormance is a result of its manufacturing process driven by its ‘DNA’, which has four main strands, says İlhan.
“The first is the productivity and the performance of the machines. Secondly is the fuel consumption of the machines. Third is the serviceability. And fourth is the operator comfort. Within these four DNAs, you can see it in every product, [the approach] is inbuilt in our engineering and our product designs.”
Walk up to a Case or New Holland machine, and odds are that one of the first things that you’ll notice are the prominent service points.
“When the serviceability of the machines is easy, the operator will do it, and residual value of the machine will remain high,” says İlhan.
“Therefore our leading points and greasing points are always conveniently located. In the harsh conditions of the Middle East, if you don’t service the machines, the pins and bushes and oil the filters, you know how quickly the value of the machine will deteriorate.”
Another unique feature on the wheel loader is a reversible fan that blows the dust out.
Operator comfort is focused on building more comfortable and spacious cabins. Larger cabin size also fits with the emphasis of safety, with visibility improved, while ergonomics and joystick control designs result in less-fatigued operators, improving productivity.
Fuel efficiency is also high on the machines, and is obviously improved when the machines are lighter.
“Though fuel prices here are not as high as in Europe, still it is an important factor for the person who is doing the performance calculations,” says İlhan.
The Case for two brands
It’s a question that Hakan İlhan has encountered before: why the two separate brands, Case Construction and New Holland, ostensibly in competition with one another? Partly it’s due to history, and to market appeal.
“Although Case Construction and New Holland seem similar, they do have a different traditional customer base, one is stronger in the agricultural sector. The other has been quite strong in Europe, the other strong in America. It is not a simple matter of putting them together.
“Also the dealer and distribution network, the culture, the feeling of the brands, the different features – it appeals to different segments. It is a question we are asked quite often.”
But, says İlhan, there’s also the simple fact of the size of the construction machinery market, which means that they’re competing mainly with other brands.
In the Middle East, the brands are known as general contractors machines, landscapers and utilities.
“The area where we want to develop is the long term relationships with major contractors, where we are seen as part of a strategic alliance, a strategic supplier. We have quite a lot to offer,” says İlhan.
As markets in the GCC recover, and growth in Saudi Arabia continues apace, contractors are under pressure to complete projects quickly. Often it is the machines which can be the difference between finishing on time.
“In the past you have had some contractors where the timeline has not been so important, so the downtime does not affect the project itself.
But now things are required to be done faster more efficiently, then you need a machine that is well-backed, the part support is there, the service support is there, and it’s a clever machine that is giving good performance.”