Associate Professor, Jagan Institute of Management Studies (JIMS), Jaipur, Rajasthan, India
The Indian tractor market is one of the largest markets in the world by volume. The domestic tractor industry is fragmented, characterized by the presence of 14 national players and some regional players. Currently low levels of tractor penetration in India, strong governmental focus on availability of finance for agriculture mechanization tools and on rural development and high irrigation potential will drive the overall growth of the tractor industry. The Indian tractor market is primarily a medium HP(horsepower) market; however, there is a gradual shift towards higher HP segments supported by a number of factors including increasing tractor penetration in Southern region which has traditionally been a higher HP market, replacement demand for higher HP tractors in Northern region, increasing use of tractors in non-agricultural applications and the growth in exports which again is a high HP market. The whole industry is at the threshold of a revolution, more sophisticated and powerful tractors are making their way into the market. This is courtesy a large exodus of farmers into urban areas, which in turn makes labour scare and costly in rural areas. The dependence on machines is increasing everyday. The emerging market of tractor industry is very encouraging, so only thing is to follow the strategy which will be able to meet the customer needs. Mahindra & Mahindra is the leading player in the industry. Mahindra & Mahindra had acquired a majority stake in Punjab Tractors Limited (PTL) in early 2007. PTL is a good strategic fit to the company, as it comes with its strength of efficient design (strong R&D abilities) and the Brand Swaraj, which enjoys a strong customer loyalty for being sturdy and reliable. This acquisition has an opportunity of getting advantages of economies of scale, sourcing benefits and vendor rationalization. The performance of Mahindra and Mahindra tractor in this tractor market is very encouraging. The business strategy is highly competitive and innovative. The company should concentrate on strategies like cost advantage and differentiation.
