Indian tractor industry


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Indian tractor industry

  1. 1. By:- RB Chauhan Jaipuria Institute of Management,Noida Indian Tractor Industry
  2. 2. Intro…  Tractors are part of agricultural machinery industry.  Tractors came to India through imports and later on were indigenously manufactured with the help of foreign collaborations.  Tractor industry plays an important part. As agriculture sector has A major contribution to India’s GDP.
  3. 3. Beginning…  Bulldozers were imported for land reclamation and cultivation in mid -1940s.  In 1947 central and state tractor organizations were set up to develop and promote the supply and use of tractors in agriculture.  Local production began in 1961 with five manufacturers (Eicher, Gujarat Tractors, TAFE, Escorts, M&M ) producing a total of 880 units per year.  And by now one third of the world’s Tractor production is in India.
  4. 4. Tractor Evolution in India Year TIV 1951-1960 8,500 (In use, Imported) 1961-1970 37,000 (Production had started with Eicher, Gujarat Tractors, TAFE, Escorts, M&M) 1971-1980 1,46,000 1981-1990 1,20,000 (Total production was-1,40,000) 1991-2000 <2,00,000 (Total Production exceeded-2,55,000) 2001-2010 Around 2,16,000
  5. 5. Current Scenario Size of the Industry Tractor market in India is about Rs 6000 crores . On an average around 400000 tractors are produced and their sale is 260000 Geographical distribution T he tractor markets of Karnataka, Maharashtra, Tamil Nadu, and Gujarat are growing ~ 50%. Output per annum Domestic sales - 350,000 units p.a. and Exports - 60,000 units p.a. Percentage in world market About 20% of world tractor production is carried out in India Market capitalization CAGR in volumes @ 10 % over past four decades with seasonal variations.
  6. 6. Stats… Uttar Pradesh is the largest tractor market in our country. One third of world's Tractor production is in India. The Total Turn Over is 10,000 crores and the Total investment is 8000 crores. With Employment of 28,000 people directly and 1,50,000 people indirectly the Tractor population is 30,00,000 compared to 9,00,000 in China.
  7. 7. Latest Development in India’s Agricultural tradition  Today in India there is an increase in awareness among the farmers for the need of farm mechanization and are keen to acquire tractor with the help of credit facilities from financial institutions.  Agronomists believe that there is need for more tilling due to depletion of moisture and repeated cultivation of land .It is precisely for this reason that the demand for tractors was well maintained even during a drought period.  Cost of tractors in India is the cheapest in world .The cost of a finished tractor here is as much as the cost of gear box in developed countries. Hence there exists tremendous scope for exports.  Animal power available is too inadequate to meet power demand of our farmers. Mechanized operations are preferred to eliminate drudgery and delay, also labor shortage during harvesting increased the use of tractor.  More farmers are opting for multiple cropping over last decade. Country's net cropped area had remain virtually stagnant while gross cropped area increased by about 4.7%. This indicate the increased popularity of multiple cropping.
  8. 8. Cont.d,  95% of tractor sales are on credit. Credit is extended by commercial banks, state land development banks and regional rural banks.  Irrigation facilities reduce reliance on the monsoon and allow for quick yielding varieties of food grain .This reduces the cropping cycle to 3 -4 months from the traditional 5 -6 months. Reduced cropping cycle require deep tilling which translates into higher demand for tractors.
  9. 9. Highlights of Indian Agriculture Sector  Key sector of economy  Contributes to 25 % of Indian GDP.  Accounts for 13 % of India’s Exports  Second largest producer of rice and wheat in the world.  Largest Producer of pulses.  Fourth largest producer of coarse grains.  Second largest producer of vegetables, groundnuts and fruits  Current average growth rate 2.2%.
  10. 10. Tractor Manufacturer in India  There are currently 14 players in the industry.  Mahindra & Mahindra is the leading player in the industry.  Monsoon season is a key driver for sales of tractors. A series of good or bad monsoon can affect the sales.  In recent years the industry has registered a good growth in sales, both domestic as well as exports. This is also partly because of the initiative of the government to boost up agriculture and agricultural machinery industry.  The medium horse power category tractors, 31 -40 HP, are the most popular in the country and fastest growing segment.
  11. 11. Major Manufacturers and Collaborators
  12. 12. Applications and variations  Farm tractor applications  Precision agriculture  Engineering tractors  Backhoe loader  Compact utility tractor  Row-crop tractor  Row-crop tractor history  Row-crop tractor safety  Modern row-crop tractors  Garden tractors  Two-wheel tractors  Orchard tractors  Automobile-conversion tractors and other homemade versions  Alternative machine types called tractors
  13. 13. % Shares of different HP tractors of Total sales
  14. 14. Conclusions  Indian tractor industry, comparatively young by world standards have expanded at a spectacular pace during last four decades.  The most popular size, of the tractor, in the country is, 35 HP, followed by, 25 and 45 HP. The  farmer's choice, of tractor size, is a compromise, between, the utility of the tractor, for multiple uses, including, haulage and, its price.