Mahindra & Mahindra (M&M) – the country's biggest tractor maker - launched a new tractor platform almost after 14 years catering to the 50-60 horsepower (hp) and above category.
The product was developed for over 3 years and the company invested about Rs 300 crore with inputs from over 100 engineers.
The two variants – Arjun Novo 605DI-I (57 hp) and 605DI-PS (52 hp) launched at company's Mahindra Research Valley in Chennai is priced at Rs 7.35 lakhs and Rs 7.15 lakhs respectively (ex showroom Pune).
According to the company, M&M has sold around 20,000 tractors in the 48 hp and above category during financial year 2014, of which Arjun formed a large chunk of its sales. The new Arjun Novo will replace Arjun 605Di which is Rs 15,000 higher than its predecessor.
The company is hoping to drive additional volumes within the segment with the launch of the new product.
"Arjun Novo will help us strengthening our presence in the higher hp tractors category," said Pawan Goenka, president, automotive and farm equipment sectors for M&M.
As per the estimates, the 40 hp category currently contributes around 16% of the overall tractor sales. The industry sold about 1,06,000 units in this segment in last fiscal (FY14).
"Our objective is to grow the segment to 18-19% of the overall tractor volumes and increase our market share in the segment," said Rajesh Jejurikar, chief executive – farm equipment and two wheeler division for M&M.
Jejurikar said that the higher hp tractors (40 and above) are gaining momentum with the growth of higher mechanisation in the farms in the country. "Usage of higher hp tractors is not really linked with the land size now. It is more linked with the mechanisation. These help in higher productivity and output," he said.
The company competes with the likes of international players like – John Deere and New Holland in this segment.
M&M will launch the product in a phased manner over the next 2 months, starting with Maharashtra, while the exports would begin after 6 months. The product will also eventually be launched in the USA, through its subsidiary Mahindra USA. "The product as of now does not meet the emissions norms for the US market. We will take at least 6 months to develop the variant required for the USA emissions," said a company executive.
Arjun Novo will be manufactured at its Nagpur plant, the company said. The company currently has tractor plants at Nagpur, Zaheerabad in Telangana, Mumbai and Mohali in Punjab.
M&M currently is the market leader in the tractor category with a market share of more than 40%. After a double-digit growth last year in the tractor category, the industry de-grew 1.2% in the Q1 of FY15, owing to crop damage because of unseasonal rains in some parts of the country in March coupled with deficient monsoon in June.
The correspondent's trip to Chennai was sponsored by Mahindra & Mahindra.