ICE in India JCB, the venerable British manufacturer of construction equipment, has long been a relatively small player in a global market that is dominated by the likes of Caterpillar and Komatsu, but there is one exception to this: India. While the company is present in 15H| countries, of the ES}, 100 machines it sold globally in 2012, around a third were in India. For JCB, India is truly the jewel in the crown. The story of JCB in India dates back to 19m when the company entered into a joint venture with Escorts, an Indian engineering oonglomerate, to manufacture backhoe loaders for sale in India. Escorts held a majority ED percent stake in the venture, and ICE 4D percent. The joint venture was a rst for JCB, which historically had exported as much as two-thirds of its production from Britain to a wide range of nations. However, high tariff barriers made direct exports to India difficult. JCB would probably have preferred to go it alone in India, but government regulations at the time required foreign investors to create joint ventures with local companies. JCB believed the Indian construction market was ripe for growth and could become very large. The company's managers believed that it was better to get a foothold in the nation, thereby gaining an advantage over global competitors, rather than wait until the growth potential was realized. Bythe end ofthe 19905 the joint venture was selling some 2, DUI] backhoes in India and had an SD percent share of the Indian market. Afteryears of deregulation, the Indian economy was booming. However, JCB felt that the joint venture limited its ability to expand. For one thing, much of JCB's global success was based upon the utilization of leading-edge manufacturing technologies and relentless product innovation, but the company was very hesitant about transferring this know-how to a venture where it did not have a majority stake and therefore lacked control. The last thing JCB wanted was for these valuable technologies to leak out of the joint venture into Escorts, which was one ofthe largest manufacturers of tractors in India and might conceivably become a direct oompetitor in the future. Moreover, JCB was unwilling to make the investment in India required to take the joint venture to the next level unless it could capture more of the long-run returns. In 1999, JCB took advantages of changes in government regulations to renegotiate the terms of venture with Escorts, purchasing 20 percent of its partner's equity to give JCB majority control. In 2003, JCB took this to its logical end when it responded to further relaxation of government regulations on foreign investment to purchase all of Escorts' remaining equity, transforming the joint venture into a wholly owned subsidiary. Having gained full control, in early 2005 JCB increased its investment in India, announcing it would build a second factory in Pune that it would use to serve the Indian market. In 2007, in what represented a bold bet on future demand in the Indian market in the face of a global economic slowdown, JCB embarked on a major overhaul and expansion of its original India factory in Ballabgarh. To sell the additional Indian output, JCB rapidly expanded its dealer network, doubling the number of outlets in six years to reach 400 by 2011. The company also localized production for more than 80 percent of the parts used in its best-selling backhoe loader. This was done both to keep costs low and to make sure dealers had immediate access to spare parts. The strategy worked; between 2001 and 2012 JCB's Indian revenues increased tenfold, and the company is now the leading manufacturer of backhoes in the country