Manufacturing India-Tractors

India is the largest market of tractors in the world by volume. M&M is the world’s No. 1 tractor company, by volume with annual sales of above 2, 00,000 tractors and presence in 40 countries. M&M is trying to enter the Chinese’s market with an association with a local manufacturer. Mahindra has sold well over 1.75 million tractors worldwide. As a new strategy, M&M having its focus on export that is currently less than 5% of total sales of 220,000 units in fiscal year 2013.

Interestingly, at one time, almost all states of India planned to have manufacturing facilities for tractors, scooters and TVs. But as usual, all these endeavours failed. However, India has many tractors manufacturers with Mahindras and TAFE as leaders, but Escorts, HMT, Sonalika and another dozen of them are in the business of manufacturing tractors. At least two of the globally reputed tractor manufacturers have set up the shops in India with modern manufacturing facilities.

New Holland Agriculture with a state of the art technology of manufacturing in Greater Noida is a 100% subsidiary of CNH Global N.V. (NYSE:CNH), a majority-owned subsidiary of Fiat Industrial S.p.A (FI.MI) – the World’s largest Agricultural Equipments Company, the leading manufacturer of Agricultural and construction equipment in the world.

John Deere established a green field project in 1999 in India and has set up a state of the art tractor manufacturing plant for John Deere tractors at Sanaswadi, near Pune, in the state of Maharashtra.

Interestingly, both John Deere and New Holland sells in India as well as export their tractors to a large number of foreign countries.

Indian farming is unique with about 102.8 million farmers. However, 61.3 million of them are having landholdings of less than 1 hectare, about 1.2 million farmers have land holdings of more than 10ha, 6.3 million between 4-10 ha, 13.1 million between 2-4 ha and 20.9 million between 1-2 ha. With such a distribution of landholding, the scope of traditional mechanization is limited. It reflects into low HP/ha and low yield in T/ha. And so around 52 % of the population is engaged in agriculture and mechanization is at 30% of the potential.

Basically, the tractors manufacturers must design features in tractors for local conditions besides its cost and robustness for easy maintainability. The Indian manufacturers must go for innovative attachments to the tractors for easily performing various operations of the farming of various food grains as well as that of various commercially beneficial horticulture items, vegetables and fruits. The industry is going for consolidation and for becoming globally competitive. India may not integrate the sophistication and luxury in designing and manufacturing tractors, but for the export market it must provide everything that can make Indian tractors acceptable.

As reported recently in ‘Hindu Businessline’, SAME Deutz-Fahr (SDF) Group, which bought the Lamborghini tractor brand from the uber luxury car-maker, is targeting rich farmers, high-profile individuals with farming interests, as also golf -courses, cricket stadiums and luxury resorts. Though the pricing is yet to be firmed up, Lamborghini tractors sell in Western markets upwards of $20,000 (Rs 10 lakh plus).

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