Sonalika International has been registering rapid growth aided by Centre’s infra push
While Mahindra and TAFE have traditionally been the two big players in tractors, Sonalika International Tractors is fast emerging as a strong Number 3 and had raced ahead of established brands such as Escorts. Raman Mittal, Executive Director, discusses the road ahead.
How would you look at Sonalika’s growth thus far?
We were selling about 50,000 tractors in 2012 and it is heartening to see this number already scaled in the first half of this fiscal. It has been a very emotional moment for us. Our products have been well accepted and we are growing at a pace unheard of in this industry. We are on a consistent growth path and will steer clear of short-term plans. Our strategy of mid to long-term planning is paying dividends and we will stick to this route.
What has contributed to this good showing?
The monsoons have definitely helped the industry in the first half but have not been evenly spread across the country. The South as well as parts of Central India are still under some stress with deficient rains.
Growth is also coming from the Centre’s push to infrastructure development where the benefits are apparent in rural areas too. Here, tractors are used beyond agricultural applications to construction and other non-farm activities.
We feel that this trend will help spur growth on a sustainable basis. With farmers’ income also set to increase with government support, this only means that a favourable policy framework will spur overall growth in tractors.
In which segments has Sonalika been gaining market share?
At present, the 30-50 horsepower (hp) market in India accounts for 85-90 per cent of tractor volumes with 50 hp plus taking up nearly 8 per cent market share. Yet, it is here that we are seeing faster growth and Sonalika is among the top two brands in this (over 50 hp) space. In some months, we were able to sell more than others and became No 1.
We have also gained substantial market share this year in the 40-50 hp segment. We continue to launch products in this category as these tractors are used throughout the year for multiple applications. In addition, we sell speciality tractors for areas such as paddy, sugarcane, vineyards and orchards.
Where do you believe Sonalika offers a competitive edge in products?
Our intent is to offer tractor solutions for every farmer community since we believe that there aren’t any generic answers. Our tractor range, which is on three platforms, starts from 20 hp and goes up to 125 hp, which effectively means that no other manufacturer has such a diverse portfolio. Even top tractor brands don’t have 100 or 110 hp.
We also customise our products depending on soil conditions and application areas. For instance, the 35 hp tractor in the south will be quite different from an identical horsepower offering in the northern regions. Sonalika has over 500 variants in the domestic market alone. We understand farmers’ needs as well as soil conditions very well and accordingly offer solutions.
We have just introduced a new range, the Sikander series, powered by a heavy duty mileage engine and incorporating many modern features.
It is my belief that this range will assure better productivity for farmers as it is more powerful and highly fuel-efficient. We have already started seeding the series in some States.
Could you throw some light on your R&D and innovation base?
We have 400 engineers in our R&D operations who have been working for the last four years in designing new products. This is a 100 per cent jump from the levels of 200 people, which remained unchanged for nearly a decade. We now design, build prototypes and manufacture on our own. We also make our own engines and transmissions.
Since we do everything inhouse, we are able to tweak and make changes in products depending on customer requirements and application areas. This also helps us to be cost-competitive and the time-to-market is also a lot quicker. We also have our own state-of-the-art product training centre that caters to dealers, staff of dealers and farmers.
How would you describe your national presence as a brand?
We were at about 8 per cent five years ago and this has now grown to 12 per cent. This increase has been a result of expanding our presence in the West and South. Today our market share in Maharashtra is around 13 per cent while Karnataka and Andhra Pradesh have seen our share grow nearly 9.5 per cent and 8.5 per cent respectively. To that extent, the last last couple of years have largely been about the West and South.
We also have the largest tractor network with 974 outlets across regions and that is also providing us an edge.
Going by this growth rate, when do you think Sonalika will attain full capacity?
We have set up the world’s largest tractor plant in Punjab, which has robotic painting shops and other modern machinery. We were doing about 40,000 tractors a year when we started building the facility. Today, it is a two lakh-per-annum units plant while capacity at the existing facility in Hoshiarpur, Punjab, has also been expanded to one lakh units.
Hopefully, if everything goes well, we should touch annual sales of one lakh units this fiscal. Growing beyond this level will mean a different set of challenges even while we have made the required investments for this purpose.
Needless to add, we are not going to be satisfied with sales of one lakh tractors and will build strongly on this base in the years to come.