On Road Price
With an eye on gaining higher share in the Indian tractor market, tractor manufacturer and farm solutions provider John Deere India (JDI) is upping its focus on tractors below 40 HP.
The company is also chalking out a strategy to develop a stronger channel network in UP, Bihar, Rajasthan and Jharkhand which are primarily lower HP markets but where it still does not have a good channel.
“We are working on our markets in 35-40 HP category and we can provide effective solutions for lower horse power,” Satish Nadiger, MD and CEO of John Deere’s India operations said, pointing out that they were market leaders in the 50+ HP segment and their market share in the 41-50 HP segment was between 10 per cent and 12 per cent.
Based on a new product mix and improved reach in regions where the company did not have strong channels JDI is eyeing an overall market share of over 10 per cent in the next three years against 6-7 per cent today.
Big on exports
The company, a wholly owned subsidiary of Deere and Company, has two tractor manufacturing plants in India – one each at Pune and Dewas in Madhya Pradesh – giving it a combined installed capacity of 1.20 lakh units. While it was also affected by de-growth in the Indian tractor market, (55,000 units were produced last year), overseas markets gave sales a big boost, accounting for 44 per cent of total sales.
“We didn’t (initially) think exports will be a big opportunity, but the quality of suppliers and talent make for a huge opportunity,” Nadiger said, adding however, that their focus will still be the domestic market.
The market had seen 11-12 per cent growth in the first six months of this year and he was optimistic that the trend was likely to continue.
In addition to local manufacturing, where products sold in the Indian market are localized to 93 per cent and those for the overseas market have 80-85 per cent localisation on account of different emission norms, John Deere India has sold $ 100 million worth of components to its sister concerns globally while its suppliers have independently exported components valued at $150-180 million to Deere companies.
The company also has its largest technology centre for R&D in Pune, and there is virtually no Deere product that has not been touched by Indian engineers, Nadiger quipped.
Custom Hiring Centres
Amongst the company’s other initiatives is setting up of custom hiring centres across India that would enable small and marginal farmers hire farm equipment. Each centre will cater to 1,000 hectares and around 150 such centres have been or are being set up in Gujarat, Maharashtra, Madhya Pradesh and Karnataka. The biggest foray in this respect is in Karnataka where 116 CHCs are being established over the next two months as part of a government initiative and equipment is available at rental rates that are 15-20 per cent lower than market rates.