M&M plans to double used-tractor outlets

Farm equipment maker Mahindra & Mahindra (M&M) is going full throttle with its expansion plan for the tractor segment. The company is expecting to double its used-tractor outlets, Mahindra Vishwas from the current 150 by March 2005.

Bouyed by the recovery in the domestic tractor market that set in post-October 2003, M&M sees a big opportunity in the pre-used tractor segment too.

Mahindra Vishwas which is a Rs 30-45 crore unit in itself sold around 3,000 tractors last year.

"We will double our Mahindra Vishwas business to 300 outlets by the end of this fiscal. Mahindra's farm equipment sector has been working on a number of things like lowering our outstandings, reducing dealer stocks, product developemnt etc. It is now lean and fit ready for great growth in future," said Gautam Nagvekar, executive vice president, farm equipment sector.

Mahindra Vishwas started with nine outlets in 2002, then went up to 45 in 2003 and ended the 2004 fiscal with 150 outlets.

The domestic tractor industry just crawled out of a three-year slump in the second half of 2004 fiscal. The industry posted a 20 per cent de-growth in first half of the last fiscal but yet managed to finish the year with a 7 per cent increase in sales.

The domestic tractor industry recently hiked prices by 2-3 per cent which is further evidence of their bullishness. "The tractor sector is set to take-off this year, Mahindra's plans are just a reflection of that. We see a 14-15 per cent growth in the industry this year," said an industry observer.

Mahindra and Mahindra sold 4116 tractors in April 2004, a 43 per cent growth over its sales in the corresponding month of 2003.

But M&M's month-on-month sales in April have slipped from around 6200 units in March 2004 largely due to the country-wide polling last month, said company officials.