Sonalika Group lines up Rs 200 cr facility

Having announced its intentions recently to enter the passenger car segment and come out with a hydrogen cell vehicle, the Sonalika Group, one of the leading tractor manufacturers in the country, is planning to put up a new production plant in the country exclusively for the production of tractors.

"Even as we begin producing passenger cars, we would like to consolidate our position in the tractor market. Apart from expanding our current capacity, we plan to put up a new production plant by next year with an initial investment of Rs 200 crore most likely in Gujarat, Andhra Pradesh or Maharashtra," said L D Mittal, chairman, Sonalika Group.

The company is in advanced talks with the respective governments and has requested allotment of 50 acres of land for the same.

With the commencement of production at the new plant, Mittal said the company would invest Rs 300 crore more.

The company also plans to expand the production capacity at its Punjab plant from 40,000 units of tractors to 80,000 units with an investment of Rs 200 crore. Of its total turnover of Rs 3,000 crore, revenues from tractors constitute Rs 1,200 crore.

India has only 11 tractors per 1,000 hectres as compared with the world ratio of 34 tractors per 1,000 hectres. The total sales for tractors in India has been pegged at 3.5 lakh units where the Sonalika group ranks third in the country in terms of sales. It reported a growth of 25 per cent this year with its sales figure of 17,100 tractors in the first six months as compared with the total sales of 32,000 last year.

Citing Gujarat to be one of its fastest growing markets, Mittal predicted the sales from the state to touch 5,000 units as compared with the sales of 3,000 units last year. The company also plans to expand its dealership network, which is made up of 60 dealers at present.

While confirming the decision to enter the passenger car segment, Mittal said that though they would be entering the small car segment, they would not be competing with Tata's one lakh car.

The group entered the multi-utility vehicle (MUV) segment early this year with the launch of 'Rhino' and plans to diversity to other segments in a phased manner. The hydrogen cell vehicle, tested at the Banaras Hindu University is likely to commence production in the next months, said Mittal.

Earlier, the company had announced that it was in talks with two European companies and a Chinese company to rope in a strategic partner for its proposed entry into the passenger car market and the decision on that would be taken soon, added Mittal.