Industry: Construction Equipment
Geography: Jamshedpur, India
Client: TATA Hitachi Construction Machinery
Challenge:Sell the client’s assets at right price in shortest possible time
Solution:A two-stage auction
Results: Assets worth INR 25 Mn sold through 6 online auctions held over 3 months
Tata Hitachi Construction Machinery, the Leader in Construction Equipment in India, provides the right kind of equipment for all Mining, Infrastructure, Construction and Agricultural needs. Tata Hitachi is one of the largest manufacturers of construction equipment in the country and has three manufacturing plants - at Jamshedpur in Jharkhand, at Dharwad in Karnataka and at Kharagpur in West Bengal. It also has a full – fledged Design and Development set-up for developing indigenous and collaborated equipment.
The idle asset under sale:
valuejunction received a mandate on ‘Work Order Basis’ from Tata Hitachi Construction Machinery Co. Ltd, to sell their idle & obsolete multi-utility vehicles, capital assets, large & small spares.
The Business Challenge:
Tata Hitachi Construction Machinery Company Ltd. had difficulty developing a streamlined process to dispose of these assets.
valuejunction was not only required to sell the asset to the right buyer to ensure good price realization, but was also expected to sell the same at the shortest possible time ensuring transparency and efficiency.
The Solution & Strategy
valuejunction decided to sell the same as re-usable working assets instead of scrap to release the best use and value from them. It then sorted the assets into various categories. Different buyers would have to be contacted for each category.
A two-stage auction strategy – Online Seal Bid followed by Online Forward Auction was carried out to encourage competitive bidding to insure a good price realization.
Results & Achievements:
Through online competitive bidding, valuejunction was able to get a good realization for the assets and for many of the items; the price superseded the client’s expectation. Within a span of just 3 months, from Jan’14 to March’14, 6 online sale events with an average participation of 7 bidders was conducted by valuejunction through which assets worth approximately INR 25 Mn were successfully sold. This was only possible because of valuejunction’s expertise, customised approach and strategy which ensured a good buyer participation in the online auction, leading to competitive betting to get the best price.
valuejunction had a happy and satisfied client in Tata Hitachi Construction Machinery Co. Ltd. and they went on the sign a long term contract with valuejunction.