M&M plans to expand product portfolio

Tractor major Mahindra & Mahindra (M&M) plans to retain its leadership by expanding its product range at either ends of the market.

The company plans to launch new models that could go up to 120 HP on the higher end in the next two-and-half to three years. The company is also contemplating entering the lower end of the market, though officials did not divulge what the lowest power tractor the company was looking at.

The Indian tractor market, during the first half of the current financial year had witnessed growth in excess of 45 per cent and is expected to close the year with growth in the region of 28-30 per cent, according to M&M executives.

In an event to commemorate the sale of one million vehicles in the last two decades, M&M today launched two new 25 HP models, 235 DI and 245 DI, that are priced at Rs 1.95 lakh and Rs 2.20 lakh respectively.

Vice-chairman and managing director, Anand Mahindra, said the company also plans to launch the Horizon 3 (H3) products consisting of 60 HP and above models in India.

The H3 models have already been launched in the US and has been successful, according to M&M executives. M&M officials said that the US operations, that is seven years old, managed to sell 10,000 units last year clocking a turnover of $100 million.

The company's executive director and president, farm equipment sector, K J Davasia said, M&M would leverage on its recent acquisition and joint venture with Chinese tractor maker Jiangling Motor Co's tractor business, by making it a low-cost manufacturing base, distributing its Indian made tractor in the large and growing Chinese market and also export to the US though its successful American operations.

Davasia added that the Indian tractor industry's piling inventory problem has been overcome in the current financial year.

"While the average inventory for the industry has a whole is around 60 days stock, it is only 20 days for M&M," he said.

He added that the total tractor market in India is expected to return to its 2001 volumes of 250,000 units per annum in the next two year. The current financial year is expected to close with an overall industry sales of 230,000 units.

The company's market share for the current financial year so far is 26.5 per cent. Growth drivers, according to M&M executives would be new product launches, innovative processes and greater focus on customers.