homeauto NewsIndia's largest tractor manufacturer looks to lightweight tractors for heavy market share gains
India's largest tractor manufacturer looks to lightweight tractors for heavy market share gains
For financial year 2023, Mahindra & Mahindra's exports grew by 15 percent to 4,07,545 units.
Mahindra & Mahindra Ltd. (M&M), India's largest tractor manufacturer in terms of market share and market value is aiming to increase its presence in the lightweight tractor market, not only in India, but also globally.
The size of the lightweight tractor market in India is not that big but not small either, said Rajesh Jejurikar, the Executive Director and CEO of M&M's Auto and Farm businesses. India's tractor industry sold a record 9.44 lakh units in financial year 2023, of which the lightweight category is around 50,000 - 60,000 tractors. M&M's market share in this segment is lower than its overall tractor industry market share of 41 percent.
"So, there is an upside for us to gain share," Jejurikar said.
In order to boost its prospects, Mahindra & Mahindra along with its Swaraj brand of tractors will come out with a lightweight series. For M&M, that series will be called "Oja" and will have a global launch this independence day, August 15.
"Global launch because it would also help us gain volumes and market share in several other global markets," Jejurikar said, highlighting North America as a potential opportunity within this segment. The small tractor segment, particularly the one with less than 50 Horse Power, is the largest segment within the overall market in the US.
On the other hand the Swaraj lightweight tractor series will be launched on Friday, June 2. "And again, Swaraj has a very little presence there and we would see Swaraj gaining market share," M&M's farm equipment division CEO said.
Oja will first be launched in India and then across different parts of the world towards the end of the calendar year.
A bigger opportunity that Jejurikar sees is that in South-East Asia or ASEAN countries. "We don't play in ASEAN at all today. And that is a lightweight tractor driven market and there is a very good upside for us to export and build business in ASEAN as well, and many other parts of the world," he said.
The increasing unavailability of farm labourers, growing mechanisation of agriculture and demand for various tractors with different horsepowers is boosting the sales of tractors in ASEAN countries. Agricultural tractors are widely used in countries like Vietnam. Import value of these tractors in 2021 stood at $517 million, according to Mordor Intelligence.
Farmers in such areas prefer small and customized tractors for agricultural purposes due to small farmland sizes. For financial year 2023, Mahindra & Mahindra's exports grew by 15 percent to 4,07,545 units. For financial year 2024, Jejurikar expects the overall tractor industry to grow in low-single-digits on the back of a high base. Sentiment, rains, and government spending in rural areas are some of the factors that he highlighted for driving demand this year.
"Right now as it’s just the beginning of the year we are being a little cautious and pessimistic maybe about the growth at around what we are saying low single digits. But we do expect to gain market share and we would expect our growth be higher," Jejurikar said.
Also Read: Mahindra & Mahindra shares may gain up to 24% post in-line Q4 show. Should you buy, sell or hold?
(Edited by : Hormaz Fatakia)
First Published: May 30, 2023 11:12 AM IST
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