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Õ Õ  Õ 
   Õ

Ú The Indian tractor industry is the largest in the world and


accounts for one third of the global production.
Ú Current capacity of the Indian tractor industry is 400,000 units
while the sales stands at 310,000 units per year.
Ú Major players include M&M Ltd, Tractor and Farm Equipment
Ltd, International Tractors Ltd, Punjab Tractors Ltd and John
Deere.
Ú 93% of the demand comes from 12 major states, of which UP
is the largest market.
Õ Õ  Õ 
   Õ

The Major export markets for Indian tractor industry are


USA and China(80% - USA).
Adequately penetrated in volume terms but under
penetrated in Horse Power (HP) terms.
Expectation by 2010: Domestic sales - 350,000 units p.a.
and Exports - 60,000 units p.a.
Long run expected CAGR - 5-7%.
Credit availability, fuel costs and monsoons are the
largest purchasing influencers.
Õ Õ  Õ 
   Õ

Ú   (4 8 9&4) )


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MAHINDRA & MAHINDRA
IN
FARM EQUIPMENT SECTOR
 ! 2

Ú Mahindra & Mahindra Ltd, Automotive Sector are in the


business of Designing & Manufacturing Multi Utility
Vehicles(eg: bolero, marshal, pickup.. Light Commercial
Vehicles (LCVs), Cars and three wheelers) with customer
satisfaction through the process of continuous improvements in
all areas of operations.

Ú Mahindra brand of vehicles have come to represent high


quality, ruggedness, durability, stability, reliability, looks, easy
maintenance and operational economy.
Ú M&M's Farm Equipment Sector origins lie in a joint venture in
1963 between the Company, International Harvester Inc. and
Voltas Limited, and was named Õ     
 
 Õ  Õ
Õ.

Ú In 1977, ITCI merged with M&M and became its Tractor


Division. After M&M's organizational restructuring in 1994,
this division was called the Farm Equipment Sector.

Ú M&M has two main tractor manufacturing plants located at


Mumbai and Nagpur in Maharashtra. Apart from these two
main manufacturing units, the Farm Equipment Sector has
satellite plants located at Rudrapur in Uttarachal and Jaipur in
Rajasthan.
Ú The Farm Equipment Sector as reported by the Company has a
dealer network of over 450 dealers and 28 area offices.
Ú M&M tractors has sold more than 13,00,000 tractors since its
inception.
Ú M&M, in 2004 announced that they had bought majority stake
(80%) in Y    
  , and renamed it
  Y   
  Y
. The plant in
China reportedly has a production capacity of 12,000 tractors
annually.
Ú In March 2007, M&M bought a controlling 43% stake in the
Mohali-based tractor firm Punjab Tractors () that will
reportedly increase M&M's share in the domestic farm
equipment market from just over 30% to 40%.
Õ    ÕÕ 

Ú The company was originally incorporated in the state of


Gujrat in 1963 with technical collaboration with
Motokov-Praha of Czechoslovakia as   

  . It was taken over by Mahindra &
Mahindra ltd. in 1978 (holds 60% equity) and re-
christened       as part of
Mahindra Tractors.
Ú The company is engaged in manufacturing of tractors in
a range of 30-45hp which are marketed under
 brand. They were previously marketed
under the   name, and before that the
 name.
Ú Farm Equipment Sector (FES) is a part of US $6.7 billion
Mahindra group, which is amongst the top 10 industrial houses
in India.
Ú FES has a subsidiary agricultural tractor manufacturing
company in India known as Mahindra Gujarat Tractor Limited
(MGTL).
Ú Mahindra group's FES is amongst the top 3 tractor brands in
the world.
Ú It holds the distinction of being the first tractor company
globally to win the Deming Application Prize in 2003.
Ú Won the Japan Quality Medal in 2007

Ú Domestic market share of FES is around 42% (Mahindra


brand: 30% and Swaraj brand: 12%)
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Ú FES is the no. 1 tractor brand in India, since 1983. Brand


Mahindra sells a range of tractors that include
× Bhoomiputra (range of 25 ± 45 HP)

× Shaan (25 HP tractor)

× Sarpanch (range of 30 ± 50 HP)

× Arjun Ultra-1, with each (except Shaan) having range of


variants based on the horse power (hp) and other attributes.
Ú Mahindra tractors are known for high fuel efficiency and
reliability.
Ú FES sells its 15 HP to 75 HP category tractors in the domestic
market.
 -.

Ú Focus on generating economic prosperity for stakeholders,


while growing harmoniously with the community and
environment.
Ú Swaraj today is a Rs 1600 crore company with employee
headcount of more than 2500.
Ú Nearly 6, 00,000 Swaraj tractors are operating in the field.

Ú 600 dealers spanning across India

Ú Swaraj Group has achieved ISO 14001:2004 & OHSAS


18001:2007 Certification and TS 16949 certification for Swaraj
Automotives Ltd.
Ú Mahindra is one of Indian companies to receive
an A+ GRI checked rating for its first
Sustainability Report for the year 2007-08 and
second in 2008 ± 2009.
Ú Mahindra & Mahindra to explore the below 30
horsepower (hp) market which are apt for small
farms around 1 to 2 acre.
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Ú MCTCL is a 80:20 joint venture between M&M and China¶s


Jiangling Motors Company having range of 18 - 35 hp tractors.
Ú M&M also has a joint venture with Jiangsu Yueda Yancheng
Tractor Manufacturing Company Limited called Mahindra
Yueda Yancheng Tractor Company in 16-125 hp range.
Ú Mahindra & Mahindra had acquired a majority stake in Punjab
Tractors Limited (PTL) in early 2007.
Ú Total tractor sales in Jan 2010 is 16879 units, as compared to
9759 units in Jan 2009, an increase of 73%.
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Ú New vision of delivering prosperity to farmers across rural


India by providing innovative crop specific farm technologies
aimed at enhancing productivity, known as 'Ê 
!"#$'.

Ú À ##% & Part of M&M's Farm Equipment


Sector, the business focuses on the complete value chain of
farm mechanization starting with land preparation to post
harvest solutions.
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Ú #+ 1" 6(


Farmers can check daily mandi prices, read weather
updates, latest crop advisories, and agri related news. Also
provides information under various other sections such as
crop information, loans, insurance, mandi database, cold
storages/warehouses and agri events.
 
Ú The company has repositioned all its dealerships as Mahindra
Samriddhi centres.
Ú In August 2008, the first Samriddhi Centre in Gujarat was
inaugurated in Jamnagar. At present, there are a total of 30 Samriddhi
Centres across India.
Ú Besides selling tractors and farming implements, these centres will
also present relevant information to farmers to keep them abreast of
world-class solutions.
Ú The Samriddhi Centres offer farmers a wide range of agri-related
services under one roof. These include insurance products, sales and
service of tractors and implements, productivity demo farms, soil and
water testing facilities, knowledge updates on the weather, crops,
eradication of pests and diseases, mandi prices, etc.
Ú Each Samriddhi Centre identifies 25 farmers in the region where it is
located, after taking into account the farmer¶s productivity in the last
Rabi season. The 25 selected farmers become members of the
Mahindra Samriddhi Club, which entitles them to a discount of 10
per cent on all spares purchased from any of the Mahindra Samriddhi
Centres.
/ ! $ !!/ $

Ú First ever <          in


Jamnagar, Gujarat on may 2009.
Ú A pioneering customer centric initiative for the farming
community.
Ú The event seeks to felicitate farmers who work together
with Mahindra¶s Samriddhi centers to achieve an
increase in productivity through the use of innovative
farming technologies.
Ú Over 1,000 farmers attended the function. The < 
        will initially be held at
10 Samriddhi Centres all across India.
+#!"# %0/

Ú Mahindra & Mahindra Ltd. entered the field of Power


Generation in F-02.
Ú Today, the engines under the brand name Mahindra Powerol
are powering Diesel Generating sets from rating 5kVA to 320
kVA.
Ú Mahindra provides the gen sets to rural and urban India which
helps providing electricity to rural people in their agri business.
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Ú With the changing demographics of the Indian population, such


initiatives are essential to ensure that India builds a
technologically progressive youth populace.´
Ú My Computer, My Mahindra, My World, they endeavour to
spread knowledge and awareness in the rural pockets of the
country.
Ú This initiative addresses the desire of a better life with more
choices and more information with convenience among the
rural population.´
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Ú The Toofan Carnival promotional campaign launched in Feb 04
was designed to launch the 595DI Super Turbo ± India¶s first
Turbo Tractor and brought to vivid life the brand promise of
µHo Jaao Toofan Pe Savar.¶
Ú Campaign was conducted across 1000 villages in 100 districts
and contacted over 3 lakh farmers.
Ú Build excitement around the brand launch, depict power and
provide an innovative µtouch and try¶ experience for the rural
consumer.
$ #46(
Ú Mahindra &Mahindra¶s FES celebrated the first anniversary in
2008 of its mobile dispensary at Kandivali, treated 14,023
patients from areas such as Damu Nagar, Hanuman Nagar and
Kranti Nagar colonies in Kandivali East, Mumbai.

Ú FES announced the addition of additional facilities to the


Mobile Dispensary, including ECG, Blood Check-up and Eye
Check-up tests.

Ú Commitment of Mahindra employees towards building a


healthy Mumbai.
Ú Employee Social Options Program (ESOPs), which is a
program for Mahindra employees to collectively donate
thousands of human hours for various social projects.
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Ú TAFE is a US$750 million tractor major incorporated in
1960 at Chennai in India, in collaboration with Massey
Ferguson (now owned by AGCO corporation, USA).

Ú ' ($  )  "* +* + (


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Ú It¶s engine plant at Alwar and transmissions plant at


Parwanoo through a wholly owned subsidiary ³TAFE
Motors and Tractors Limited.
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Ú TAFE comes under top five tractor manufacturers in the
world.
Ú TAFE is also involved in making diesel engines, gears,
panel instruments, engineering plastics, hydraulic pumps,
plantations and passenger car distribution through other
divisions and wholly owned subsidiaries
$ F$! $   
Ú Ê ""   "  has, apart from the tractor
manufacturing also deals in a range of air cooled and water cooled diesel
engines up to 80 HP with plans are on to increase the product range up to
125 KVA and produces a range of transmission components.
Ú Ê    is a wholly owned subsidiary of TAFE involved in
the manufacture and marketing of farm implements, trailers and accessories,
distribution of passenger cars, manufacture of hydraulic pumps and panel
instruments to discerning customers both in India and overseas.
Ú Ê 2 ++ !%  3" produces a range of components for
the consumer electronics, IT, white goods and automotive sector and have
the distinction of being awarded Toyota Quality Award.
Ú Ê 2 !" "  3" produces a range of automotive batteries
for both 2-wheeler and 4-wheeler applications for sale through AMCO
Batteries Ltd. As well as for sale directly through a dedicated distribution
channel under the brand name of ³Speed´.
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Ú One out of every four tractors used in India is made by


TAFE and for more than four decades TAFE's tractors have
been the farmer's first choice due to excellent quality,
competitive rates and great after sales services.
Ú Annual revenue of 6500 crores approximately. and a sales
volume of over 80,000 tractors annually.
Ú TAFE is certified by both Õ 4..- and Õ -5..-.

Ú TAFE, first tractor company to be recognized for strong


commitment to excel at (Confederation of Indian Industry )
CII -EXIM Bank Award for Excellence.
TAFE¶S MODELS

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Ú Across India network of more than 800 dealers and


authorized parts stockists and 122 part stockists provide
genuine tractor parts under the Parts Support System.
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Ú An expert team of professionals ceaselessly coordinates
with dealers and authorized service centers in order to
ensure zero-breakdown.
Ú To offer immediate technical support, toll free call
centers are established across the nation.
Ú To meet emerging needs and improving features of the
tractors, TAFE also monitor tractors in the field and
that¶s an edge under our Service Support System.
Ú In order to ensure service at customer's door steps, a
system of mobile service personnel to reach customers at
their site is in place.
D 

Ú In the agriculture research area, TAFE has been


establishing its own adaptive research facility at J Farm
which near to Chennai. This 500 acre farm has built a
national and international reputation for adaptive
research in various crops such as paddy, vegetable and
mango cultivated under marginal rain fed areas.
Ú It serves as an extension service to farmers advising
them on appropriate and cost effective agricultural
practices through media releases and through the closed
community portal jfarmindia.com which covers about 82
different crops grown in the Indian sub continent.

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Ú vision of TAFE¶s late founder chairman :-
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Ú Service staff will play key role in educating farmers on the farm
mechanization and economical use of the tractors to increase the
agriculture production.
Ú Dealers and company personnel go through a rigorous training
programme.
Ú An online help desk is also administered by the centre called the
µTechnowledgy Desk¶. This desk provides solutions to any of the
territory staff for their technical problems faced in their day to day
experience in the field. A panel of experts has been formed to
consider the problems and provide advice on the matter relating to
tractor applications, use of implement, issues related to agriculture
and its mechanization etc.
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TAFE has worked towards impacting society through partnering
development efforts. It is involved in the areas of education and
health care through the Amalgamations group charities.
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Ú TAFE¶s products are engineered to more than meet emission
standards.
Ú Its plants are lush bases of greenery that are nurtured with sensitivity
and care.
Ú All its plants practice rain water harvesting to ensure water table
rejuvenation.
Ú Chennai plant is a bird sanctuary that attracts many varieties of
migrant birds.
Ú TAFE is certified under ISO 14001 for its environment management
systems.
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Ú TAFE partners institutions offering treatment, support and
care to people suffering from terminal illnesses such as cancer.
Ú It has been and will continue to be at the forefront of support
at times of natural calamities.
Ú It also supports schools near its plants by infrastructural
inputs.

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Ú TAFE empowers orthopedically challenged women living in
and around Madurai through its J-Rehab centre, to be
financially independent and respected members of society,
which would have otherwise considered them as liabilities. It
provides these women a conducive surrounding to work in
and all the special facilities they need.
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Ú The tractor industry is in a mature phase today. Hence, there arises a


need to grow through inorganic means. With M&M acquiring
Punjab Tractors and TAFE acquiring Eicher, the total number of
players in the Tractors market in India has decreased considerably.
Hence, reduce competition & maintain decent operating margins.

Ú Acquisitions abroad would help in reducing the dependence on the


monsoons as well as the domestic market.

Ú Also, joint ventures with or acquisitions of foreign players shall


provide access to their Research & Development facilities which
would help in offering better quality products in the domestic market
as well as improve reach in overseas markets.
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Ú The large HP segment (>40 HP) is expected to grow at a
much faster pace as compared to the other segments.

Ú TAFE being a very small player in the high margin large


size tractor segment needs to improve its presence so as
to improve its overall profit margins and presence across
all segments in the tractor industry.
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Ú The major chunk of growth is expected to come from
under penetrated states of Western and Southern India.
Ú TAFE needs to make a strategy to successfully capture a
major part of the tractor sales in these regions.
Ú Currently, it lags behind the market leader, M&M in
these regions by a substantial margin. Hence, the
challenge for TAFE is to successfully bridge this gap
through its diversified product offerings and vast
distribution network.
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Ú A larger dealer-network than necessary underlines the
need for TAFE to optimize its dealership network and
reallocate dealers as per customer density.
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Ú Debt/Equity ratio for TAFE is 0.22, much lower than the
other listed players in the Industry. This gives TAFE
sufficient scope to raise funds from the market to be
utilized for funding its acquisition plans, entering the
high HP segment as well as focusing more on export
markets.
Ú The funds raised can also be utilized to fuel its
diversification plans into farm related agricultural
implements and emerging areas such as Airports, Hotels,
Golf courses, etc.
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