India’s largest tractor player Mahindra and Mahindra (M&M) is betting on the fast growing horticulture segment to gain volumes in a year that may witness deficient rainfall.
M&M launched a lightweight compact tractor range called ‘Swaraj Target’ on Friday priced at Rs 5.35 lakh. Swaraj Tractors will initially launch two models in the 20-30 horsepower category under the ‘Target’ range and these will be initially available in Maharashtra and Karnataka. The Swaraj Target 625 will be introduced in due course, the company said.
Hemant Sikka, president, Farm Equipment Sector, M&M said that the horticulture segment is growing at a faster clip compared to overall industry – “If the overall industry is growing at say 6 per cent, this segment is growing at about 18 per cent now.”
M&M does not have a specific light-weight compact product for horticulture farmers at the moment. But riding on its Target range, it is eying a 27-30 per cent market share in the segment. M&M currently enjoys a 42.2 per cent share of India’s tractor market (as of year till date). As such light-weight compact tractors sell around 50,000 units a year. Tractors upto 30 horsepower sell about 100,000 units a year.
The company is trying to reposition its Swaraj brand as an aspirational brand for progressive farmers who are more open to adopting new technology. The Target range has been developed with an investment of Rs 200 crore, Sikka informed.
"Swaraj brand core rests on three aspects - power, josh and dependability, and now we are trying to make it aspirational. Former Indian Cricket team captain MS Dhoni will endorse the Swaraj brand," said Rajesh Jejurikar, executive director and CEO, auto and farm segment, M&M.
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“The investment has gone into design and development of products as well as augmenting manufacturing capacity. These products would be made at the Mohali plant which now has two assembly lines, and we are adding a third assembly line within the next few quarters,” said Harish Chavan, CEO, Swaraj Division, M&M.
The year 2023 is likely to have ‘below normal’ rainfall according to Skymet, which may act as a dampener for tractor sales. Signs may have started showing already. Kotak Institutional Equities said in a note on Friday that tractor volumes declined by low single digit year on year in May. The analysts, however, noted that farm sentiment remains buoyant given record high Ravi harvest, high reservoir levels and favourable prediction by IMD about the normal southwest monsoon.
Chavan said central and southern India are likely to see normal rainfall, while the north is already well irrigated. Therefore a slightly below normal monsoon wouldn't dampen farm sentiments significantly.
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