Mahindra & Mahindra (M&M) could soon use China as the second export hub for its tractors by moving a part of production from India.
MUMBAI: Mahindra & Mahindra (M&M) could soon use China as the second export hub for its tractors by moving a part of production from India.
Anjanikumar Choudhari, president, farm equipment sector, told DNA Money that this initiative constitutes yet another step in the journey towards becoming the world’s largest tractor company in terms of volumes by 2009.
“We want to first localise the DI (direct injection) engines in China, and if we can do that, we should be on track. Over the long term, we are looking at an alliance to even establish a large facility but need to be sure about the kind of vendors we take on board. Moreover, quality and IPR issues are very important,” he said.
Choudhari says that both acquisitions and strategic alliances are part of the mid-term growth plan for tractors.
The company has been able to leverage alliances with Mitsubishi Agricultural Machinery for its US foray, as well as Tong Yang of Korea, both of which have worked for “our mutual benefit”.
M&M is also looking at potential alliances in the Middle East and has kicked off talks for a foray into Latin America. Last year, it placed a bid for the Romanian government-owned tractor manufacturer, Tractorul, which has since gone into cold storage. The recent buyout of Punjab Tractors could also help out in its global drive, he added.
For the domestic market, the company has outlined a four-fold strategy to help achieve its 2009 goal for tractors. This includes refreshing its current line-up, enhancing fuel efficiency, introducing more powerful tractors (of up to 80-95hp) and offering products for emerging sectors such as construction equipment and orchard farming.
According to Choudhari, orchards have emerged as an interesting opportunity, thanks to the government’s boost to horticulture.
The estimated demand for tractors could be over 3,000 units and this is where its alliances with Mitsubishi and Jiangling could come in handy. M&M acquired the manufacturing assets of China’s Jiangling Tractor Co in 2004.
M&M is also in talks with Kirloskar Oil Engines to make more engines for Punjab Tractors and its own gensets business.
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