M&M to source compact tractors from China JV

Tractor and utility vehicle maker Mahindra & Mahindra (M&M) will use compact tractors from its Chinese joint venture company Mahindra China to plug a hole in its product portfolio for the US market.

Mahindra, which expects to sell over 8,000 tractors in US this year, is also gearing up to set up its third plant there, this time on the west coast of the country.

Mahindra China, which is a 80:20 venture between Mahindra &Mahindra and Jiangling Motor Company Group (JMCG), will end its financial year in December with sales of 2500 units, 600 of which have been exported to US and Australia.

"In both US and Australia, compact tractors have been the fastest growing in terms of volume sales but M&M does not have any compact tractors in its range. Jiangling's products are quite complementary to ours and this will help us address one of our biggest export markets, the US," said Anjanikumar Chaudari, who will take over as the president of the farm equipment sector, from January 2005.

M&M's tractor sales in US in the previous fiscal and the first six months of this year was lower than the company's expectations, according to company executives. This was because the US market has been experiencing a high demand for compact tractors this year.

Jiangling tractors will now be expected to get M&M a slice of that growing market. Jiangling tractors will sell under the Mahindra brand in the US.

Besides trying to get a foothold in the Chinese markets and enchancing its global portfolio M&M will use its Chinese subsidiary to source components for its automotive and tractor operations. China has been an important part of M&M's larger plan to emerge a major player in the auto component industry.