Mahindra & Mahindra aims for top tractor spot

Mahindra & Mahindra (M&M) is slated to become the world’s biggest tractor maker in terms of sales.The company, which took over Punjab Tractors last year, strengthened its grip on the global tractor market after inking a joint venture with China’s Yancheng Tractor. M&M enjoys top position in India, the world’s largest tractor market, and its increased say in China, the second biggest, is set to propel the company ahead of global rivals John Deere of US and CNH of Italy (of Fiat group). Currently Mahindra occupies third slot globally and hopes to occupy the No. 1 slot soon with the latest Chinese JV. Bharat Doshi, chief financial officer of the company, said M&M expects sales of 1.75 lakh tractor units this year, including joint ventures and subsidiaries. John Deere sold about 1.6 lakh units last year. The new joint venture with stateowned enterprise Yancheng Tractor will see M&M holds 51% stake in a new company Mahindra Yueda Yancheng Tractor Co where the Chinese company will transfer all its tractor-related assets and current liabilities. Mahindra will pay around $26 million for its stake.“The intention is to become number one in whatever we do and whichever markets we are in,” Mahindra group VC & MD Anand Mahindra said, when asked whether the company was headed towards becoming the numero uno in tractor market. Mahindra controls about 42% of India’s tractor market, the majority through its own brand (32%) and the rest through Punjab Tractors (10%). The company also has a fully-owned subsidiary in US (Mahindra US) that recorded sales of around 10,000 units last year and an existing joint venture in China with Jiangling Motors (Mahindra China Tractors) which sold about 5,000 units.Doshi said Yencheng Tractor, the third-biggest tractor maker of China, had sales of 26,000 units last year. Asked whether the company was profitable, he only said, “It is an EBITDA positive company.” The JV with Yancheng, that sells tractors under the Huanghai Jinma brand, gives Mahindra increased presence globally and also access to tractors with up to 125 horse power. “We will also have a large manufacturing base which will be used to not only for the domestic market but also for exports. The combined distribution network of both our operations will give us a much larger presence in the market,” said Anjanikumar Choudhari, president of Mahindra’s farm equipment sector.

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