Customizing for Emerging Markets

As evidenced by the materiality analysis, both CNH Industrial and its stakeholders believe in the strategic value of the Company’s activities in Emerging Markets. Stakeholders have numerous, high expectations of a global company such as CNH Industrial; they expect it to be an example of good practice and to provide guidance in developing regions.

CNH Industrial adopts the same standards and management systems across all countries in which it operates. Indeed, the WCM management system has been implemented at all 14 plants present in Emerging Markets. However, some aspects are managed according to the specific needs of local economies. These regional differences and market-specific aspects were evidenced by the materiality analysis, and will be considered within their regional context in order to give each the appropriate emphasis and provide a balanced overall picture.

A significant example of such differences can be found in the guidance CNH Industrial provides to local suppliers: from requesting the adoption of a code of ethics in defense of social issues, to working towards the best possible management of production sites through the dissemination of the World Class Manufacturing program (see also page 162). In parallel, the Company also promotes or actively participates in projects aimed at developing local communities (see also page 114), such as youth training projects, which have a dual purpose: to develop technical professionals for the Company itself or its service network, and to give young people the professional skills required by local labor markets (see also page 121).

As for products, CNH Industrial’s approach is to meet market demand by offering products that are best suited to customer requirements; therefore, when necessary, some product lines are modified or entirely redesigned on site to better meet customer needs. To this end, CNH Industrial has set up research centers in Brazil, India, and China (see also page 137), which actively participate in knowledge development and technology transfer within the Company. These R&D centers, which are managed by the Product Development and Engineering function, endorse local talent-hiring as well as knowledge sharing, which occurs mainly through web platforms and IT systems.

Furthermore, Regional Operating Groups were created under the same function to develop products that specifically meet local needs in terms of technical requirements, assisted maintenance, and lower costs.

In July 2014, CNH Industrial built and inaugurated a new manufacturing complex in the same area as its previous assembly plant in the province of Heilongjiang, China. The vertically integrated production site features the latest fabrication technology and two state-of-the-art painting facilities. Automated Guided Vehicles are used to assemble and test finished products, so as to guarantee the highest quality standards. Within the complex is a Customer Center with a spacious showroom to provide support to dealers. In addition, there is a Research & Development Center, opened in September 2013, which has a dedicated outdoor test track and also houses the engineering team tasked with designing components and modifications for the domestic market. These facilities are complemented by the nearby Spare Parts depot and Training Center. The new manufacturing plant will produce a wide range of product lines: seeders, tractors, combine harvesters, and corn pickers, along with their headers, balers, and hay tools.

It will host a complete line of equipment for the full mechanization of corn, wheat, soybean, and hay production cycles. Most of these products will be adapted for local conditions or entirely developed for the Chinese market.

In 2014, Case IH launched the Axial-Flow 4000 Series combines, designed to suit the specific needs of Chinese farmers and offer premium comfort, high capacity, and the unsurpassed grain quality consistently delivered by Axial-Flow technology. The two models, Axial-Flow® 4077 and 4088, are produced through global sourcing at the manufacturing site recently opened in Harbin, providing Chinese farmers and state farms with locally manufactured, first-class harvesting solutions.

CNH Industrial has a long tradition of actively contributing to the development of Indian agriculture, particularly through New Holland Agriculture’s advanced products and high quality services, aimed at enhancing the efficiency, productivity, and prosperity of local farmers. In September, New Holland Agriculture launched the latest Excel series tractor, the 6010. Fitted with a 60HP 8000 series turbocharged engine, the Excels are expected to satisfy the more demanding requirements of Indian farmers, such as for higher horsepower tractors to further increase their productivity. New Holland launched the new tractor in Punjab, India’s largest producer of wheat and a major rice producer. In 2014, Case Construction Equipment launched the new 96 horsepower 851 EX Backhoe Loader on the Indian market.

Designed and manufactured at the Pithampur plant, this backhoe loader is the most powerful model available in India, and ranks first in the three-model range that also includes the 770 EX and 770 EX Magnum. The reliable and reputable 96 horsepower 8000 engine, developed by Case’s partner FPT Industrial, delivers powerful performance and fast response time, enabling operators to maximize productivity. Coupled with exceptional fuel savings (up to 13%) resulting from the air aftercooler system, this makes the 8000 series the most fuel-efficient engine on the market. The load sensing hydraulic system delivers maximum power where needed, while the simultaneous operation of the hydraulic receivers maximizes productivity and minimizes fuel consumption. The hydraulicallyshifted clutches enable the operator to change direction and travel speed during operations, while the control valves deliver smooth shifts in speed and direction, resulting in seamless and accurate maneuvers.

Case Construction Equipment also upgraded its compactor line-up with the introduction of the 1107 DX vibratory soil compactor, now also available in Africa and the Middle East. This improved model is available in three configurations to meet every surface compaction need, and offers high performance and reliability, excellent productivity, an easy-to-service package, and extended operating life even in the most extreme conditions. The 1107 DX vibratory soil compactor offers high levels of operator comfort and safety. The operator cab is accessible via a 4-step ladder; a new two-post canopy structure enhances front and side visibility, while the redesigned tilting engine hood facilitates rear visibility. A front guardrail offers full protection against falls, while the easy-to-read instrument panel is completely sealed for better protection and features warning lights for clogged filters. The 90° rotating seat allows the operator to control both the rear wheel and front drum, and is well-suited to jobs requiring multiple forward and reverse passes. Finally, daily and regular maintenance can be performed at ground level thanks to the ease of access to all vehicle service check points.

In Brazil, Iveco Bus is known for its public transport solutions. These include models mounted on a chassis specifically designed for the Brazilian market to meet the demand in the 17-ton vehicle segment, one of the fastest growing in the country due to the renewal of public transit fleets in large cities. The 170S28U chassis is manufactured on a dedicated product development platform established for the bus and coach segment at the Iveco Sete Lagoas plant (Brazil). The two configurations available, urban bus and charter/intercity bus, offer transport operators greater flexibility during missions.

Moreover, Brazil’s government chose Iveco’s CityClass for its Caminho da Escola program, which provides school transportation for children, especially those living in rural areas. In collaboration with Brazilian company Neobus, the Commercial Vehicles segment developed a new school bus by updating its Daily 70C CityClass according to specific federal government requirements (including on price). The new features include 29+1 or 36+1 passenger seats, depending on the wheelbase, a modern and streamlined exterior, more spacious interiors, and greater passenger comfort. In addition, the drive system was specifically designed for Brazil’s rural roads.

Another new model launched onto the Brazilian market by Iveco in 2014 was the medium range Tector 150E21 Economy 4X2 truck, designed, developed, and manufactured at the Sete Lagoas plant (Brazil). The model marked the launch of the Economy generation, featuring more efficient propellers, which give the new Tector the most power and torque in its class, and 15% more fuel savings than the segment sales leader. The vehicle maintains the traditional robustness of the Tector family. With a maximum allowable weight of 15,400 kilos, it has a rigid chassis and is compatible with any additional equipment.

COLLABORATION WITH THE BRAZILIAN GOVERNMENT
Once again, the Brazilian Government renewed its partnership with New Holland Agriculture for the Programa Trator Solidário in Paranà. The program, started in 2007, aims to give small producers access to agricultural mechanization by offering products at lower-than-market prices, with savings of up to 16-18%. The machines offered by the brand in 2014 included the TT 3840, TT 3840F, and TL 75 tractors and the TC5070 combine. The program offers particularly good value for group purchases among three or four producers. New Holland Agriculture is a long-standing partner of the project, and the only one accredited by the local government, because its products are particularly suited to Brazil’s geographic characteristics and to soybean and wheat harvesting.
Additionally, Case Construction and New Holland Construction are involved in the Programa de Aceleração do Crescimento (PAC) to promote growth acceleration. The PAC is a major infrastructure program of the Brazilian federal government, essentially focused on improving Brazil’s infrastructure through a variety of means.

 

 

GRI: 
G4-DMA;