 "John Deere India to focus on below 40 hp tractor market")
John Deere India (JDI), the local arm of US based John Deere Global is now eying higher share of Indian tractor market especially in on tractors below 40 hp. Essentially, it has been catering to market demand in the 50 hp to 75 hp tractor segment.
Now, the company is planning to develop a stronger channel network in UP, Bihar, Rajasthan and Jharkhand which are primarily lower hp markets. Currently, JDI is market leader in in the 50 hp and above tractor segment with more than 30 per cent market share.
Now, the company is planning to develop a stronger channel network in UP, Bihar, Rajasthan and Jharkhand which are primarily lower hp markets. Currently, JDI is market leader in in the 50 hp and above tractor segment with more than 30 per cent market share.
"We are not a significant player yet in India. But there are growth opportunities to market our products. We have market leadership in more than 50 hp category and are gaining business in 40-50 hp. We are working on our markets in 35-40 hp category. We expect the 12-15 per cent growth to continue through this year.The tractor industry on the upswing in the last six months, which it expects will continue through the year. However, what will change is the technology and solutions to make the tractors in this segment more productive," said Satish Nadiger, chief executive and managing director, John Deere India.
The company had exported 25,000 units worth Rs 2,750 crore in the FY16 to countries including the US, Europe, Canada, Africa and Thailand. Last year the the company produced around 70,000 units of tractors in India. So far, the company has invested Rs 1,200 crore in India.
John Deere India has a capacity to manufacture 1.20 lakh units. It has one plant each in Pune, Maharashtra and Dewas in Madhya Pradesh.
For John Deere, South India contributes highest sales (17%) followed by Central India and Punjab. It has a dealer network of 427 and no plans to expand it further. In Tractor manufacturing, it has achieved localisation of up to 90 per cent.
The domestic tractor industry is bullish on the growth in the sector over the prospects of good monsoon season this year after two consecutive years of drought. The tractor industry has projected a growth of nearly 10 per cent this year after the sales had slipped by 10 per cent during 2015 calendar. The domestic tractor industry had clocked sales of under 5.5 lakh units in 2015 due to drought and consequent fall in demand in the farm sector. India is a big market for tractors which are in the 35 - 75 hp band.
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The company is eyeing an overall market share of over 10 per cent in the next three years against 6-7 per cent today.
JDI is also setting up custom hiring centres across India that would enable small and marginal farmers to hire farm equipments. Each centre will cater to 1,000 hectares and around 150 such centres have been set up in Gujarat, Maharashtra, Madhya Pradesh and Karnataka.
John Deere has recently launched JD Link - a telematics service using mobile phone technology to provide information about the tractor operations Customers can monitor, track and capture details on the performance of individual tractors, including usage patterns, service timings, theft alerts, and an acreage meter to calculate the size of an area even it has an irregular field shape or dimensions.