Fiat Group tractor-maker New Holland today said it will double the production capacity of its India facility to 60,000 units annually within the next two years and plans to make the country a manufacturing hub for its other farm equipment machinery.
The company, which had initially put in over Rs 250 crore to set up its Greater Noida plant with a 30,000 units per annum production capacity, did not specify the investment required for the expansion, but said it would be "substantially" more than the initial amount.
"We plan to increase the capacity dramatically in the next two years... We are looking at doubling the capacity," New Holland Fiat (India) Managing Director Stefano Pampalone told reporters here.
"It will be substantially more than the initial investment," he added.
The company has grown at a compound annual growth rate of 23 per cent for the last 10 years and to meet demand, capacity addition has become very necessary, he added.
"Last year we sold about 24,000 units, including exports, and this year we will touch 35,000 units. So capacity is a serious issue for us," he said.
The company sold about 18,000 units in the domestic market last year. It claims to have a share of about 5 per cent in the estimated four lakh units tractor market.
Besides tractors, the company is exploring the possibility of manufacturing other farm equipment in the country.
"India will be the base for our global production. We are looking at other products such as sugarcane harvesters, cotton pickers and balers for their production in India," he said.
The company will carry out a market study for locally producing these equipments and "it is likely happen in the next three years," he added.
The wholly-owned subsidiary of the USD 14 billion Case New Holland company, a Fiat Group firm, has so far imported a few sugarcane harvester units and one cotton picker unit into India.
Asked if the company will look into setting up a new facility for this purpose, Pampalone said: "If economic viability is there, we may look at other options also."
On new product offerings, Pampalone said the company will introduce 15-20 variants of its existing tractors. It has a range of products in the 32-75 horsepower category.
Speaking about New Holland's sourcing plans for India, Pampalone said the company supplies components to its global facilities in North America, Latin America and Turkey.
"We will increase the sourcing," he said, but declined to share details.