M&M sells one million tractors: plans capacity expansion
08 December 2004
New Delhi: Mahindra & Mahindra (M&M), which has a 26.5 per cent market share, in the domestic tractor market is undertaking an aggressive product strategy to maintain its position. Anand Mahindra, vice-chairman and managing director, M&M announced during a press conference that M&M had become the first Indian tractor unit to achieve sales of one million units in a year. He also announced that launch of two new 25-horse power (HP) models, 235 DI and 245 DI, priced at Rs1.95 lakh and Rs2.20 lakh respectively. He said the company was working on more rollouts.
These could include the high horse power tractors from the Horizon-III range or compact tractors for which the company is conducting a feasibility study to introduce them in India. These may be launched in the Indian market within the next year. M&M currently exports the Horizon-III tractors under which it has tractors in the 65-70 HP range.
The H3 models have been launched in the US and have been successful, according to M&M executives. The officials said the US operations of the company, established seven years ago, managed to sell 10,000 units last year clocking a turnover of $100 million.
M&M also plans to produce a 120 HP tractor under the range between the next 1 or 2 years and is contemplating entering the lower end of the market, though officials did not divulge what the lowest power tractor the company was looking at.
M&M officials said the Indian tractor market grew by more than 45 per cent during the first half of the current financial year and is expected to close the year with growth in the region of 28-30 per cent. The bullishness in the domestic tractor industry is helped by better availability of credit in rural areas they said.
K J Davasia, M&M''s executive director and president, said M&M''s recent acquisition and joint venture with Chinese tractor maker, Jiangling Motor Co''s tractor business would be M&M''s low-cost manufacturing base. The Chinese company would distribute M&M''s Indian made tractors in the large and growing Chinese market and also export to the US though its successful American operations. He said the total tractor market in India is expected to return to its 2001 volumes of 250,000 units per annum in the next two year. The current financial year is expected to close with overall industry sales of 230,000 units.