2.

1 About the Company

The Escorts Group, with Escorts Limited as its flagship company, is among
Indias leading corporations operating in the diverse field of agri machinery,
construction & material handling equipment, automotive & railway ancillaries
information technology and financial services. The group has 15 modern
manufacturing facilities & an extensive marketing network spread across the
country. The genesis of Escorts goes back to 1944 when two brothers, Mr. H.P.
Nanda and Mr. Yudi Nanda, launched a small agency house, Escorts Agents Ltd.,
in Lahore. The companys principal activities were trading and representing
leading overseas manufacturers for the sale of their products in India. One of its
dealerships was for the Massey Ferguson brand of tractors.
EL promoted Escorts Tractors Limited in 1969 as joint venture with Ford Motor
Company of USA for the manufacturing of Ford series of tractors. The tractors
manufactured were in the 45-50 HP range and ETL became the market leader in
this segment with a share of above 50%. Consequent to FMCs disposal of
tractors operations to Ford New Holland, USA, Ford new Holland acquired the
shares of FMC in ETL. Following an agreement in 1995 to end the joint venture
association, EL acquired the entire stake of ford new Holland in August 1995,
making escorts tractors ltd. a subsidiary of Escorts Ltd. Over the years, Escorts
has sured ahead and evolved into one of Indias largest conglomerates. Till 199394, all these activities were being carried out in various divisions of EL. EL
undertook a major restructuring exercise between 94-98 spinning off the
divisions into separate companies. The restructuring exercise-comprised
consolidation of the agri-machinery business by merger of ETL with EL and
having off various divisions into separate companies. Bi wheeler division was
spun off to Escorts Yamaha Motors Ltd., construction equipment division to
Escorts construction equipment Ltd., telecommunication equipment division to
Escorts communication Ltd., EL booked gains of Rs. 2091 million over the four
year period 1994-95 to 1997-98 though the sale of these the sale of these
divisions. The main products of Escorts group currently comprise of agrimachinery, information technology, health care, financial services, railway
components, auto components, construction and material handling equipment.

ESCORTS HISTORY- MAJOR MILESTIONES

1944

Escorts started Escorts Agency Ltd. in Lahore.

1950

Established India first Farm Mechanization Institute at Azadpur.

Later it was shifted to Kashipur.

1958

Started import MF tractors from YUGOSLAVIA for marketing in

India.

1960

A manufacturing plant was set up at Faridabad.

1961

Acquired license to manufacture URSUS/ESCORTS tractors.

1969

Signed a contract with Ford Motor Co. (USA) to manufacture Ford

3000 Model tractors.
Established EIFM (Escorts Institute of Farm Mechanization) at
Bangalore (India), the largest institute Asia & in the world.

1971

Introduction of Ford Brand tractors.

1974

400 tractors were exported to Afghanistan.

1975

Turnover crossed the Rs. 200 million mark for ETL

Profit after Tax was Rs. 8.7 Million.
Declared a Dividend of 10%

1977

Commencement of Escorts Scientific Research Centre, known as

knowledge Management Centre at Faridabad by developing its own
engines for E27 & E37 tractors.

1979

Turnover crossed the Rs. 50 crores mark.

1981
-82

Development & Introduction of a three cylindrical engine for E355.

1984

75000th tractor came out on the field.

1988

The annual turnover goes beyond Rs. 100 crores.

A Dividend of 45% declared for 15 months.

1993

Introduction of Ford 3620.

1995

Termination of tie up & ford turned into Farmtrac

1996

Separation of JV with FNH & introduction of Farmtrac.

1998

Introduction of powertrac.

Agri-Machinery Group
Escorts Limited (EL) is the flagship company of one of Indias leading business
groups, the Escorts Group. The company was incorporated in 1944 and is today,
a leading manufacturer of Agri Machinery Products, Auto Suspension and
Ancillary Products, Railway Equipment and Material Handling and Construction

Equipment. The company is widely acknowledged as one of the pioneering

agents of farm mechanization in the country and has been playing a pivotal role
in the socio-economic progress of the country for more than five decades.
Escorts is known to be an Indian multinational and has established
technological and business collaborations with leading companies across the
globe. Escorts AGRI MACHINERY GROUP (AMG) was set up in 1960 and
they rolled out their batch of tractors in 1965 under the brand name of Escorts.
Today its tractors are marketed under three brand names, viz. Escort, Powertrac
and Farmtrac.
Escorts Brand of tractors is symbolic of reliability and enjoys the confidence of
the farming community for the last 40 years.
Powertrac Brand of tractors is the most fuel-efficient tractor in their respective
categories that offer excellent value for money and have helped the farmer
improve their quality of life.
Farmtrac Brand is the most powerful premium range of tractors that give
maximum productivity to the farmers.
As far as figures go, the company has more than 1600 sales and service units,
and footprints in over 40 countries. The management of Escorts takes great pride
in their technological expertise which has seen the company introduce more than
45 different tractor variants within the 25 to 80 HP (Horsepower) ranges, over
16000 constructions and material handling equipment and become the worlds
largest manufacturer of Pick-n-Carry cranes.
The companys in-house R&D (Research and Development) unit is spread over
100,000sq. and has been recognized by the Department of Scientific and
Industrial Research, Ministry of Science & Technology, Government of India for
the period of 2008-2011.
In 1944 prior to the independence Escorts started as Escorts Agency Ltd. in
Lahore. In 1965 the first batch of tractors from Escort Agri Machinery Group
came out on the field with the brand name of Escort. Today more than 6 lakhs
tractors of the company are toiling under the sun.
Not only in India, the tractors of the company are also being exported to a no. of
countries. Escorts has a wide range of tractors. The Head-Quartet of Escorts is in

Faridabad. The tractors of the Escorts Ltd. are known worldwide because of its
quality product. It has a wide range of tractors. It has three well accepted and
powerful brands Escorts, Powertrac & Farmtrac. All the three brands of Escorts
AMG have been designed in a manner that they complement each other in the
market place. The Escorts Institute of Farm Mechanization (EIFM) is located in
Bangalore (India). The main purpose of EIFM is to supply proper or needed
machinery in India for Farmers economics or wealth. This is known as Farm
Mechanization. Its purpose is to represent leadership of Escorts in agriculture
arena leveraging the knowledge, product & service of AMG.
Among all the agri Machinery companies Escorts become the first tractor
manufacturing company in the world to win the TS 16949 Certification for
quality.

2.2 Forms of Ownership

In December 1959, Escorts agents ltd. was converted into a public limited
company and was renamed as Escorts Limited (EL). In January 1960, EL
decided to set up manufacturing facilities for making tractors in India under the
Escorts brand name in the 25-40 Horsepower categories.

2.3 Nature of Business

The Escort group is among Indias leading engineering conglomerates operating
in the high growth sector of Agri-machinery, Construction & material handling
equipments, Railway equipments and Auto components. Having pioneered farm
mechanization in the country. Escorts has played a pivotal role in the agriculture
growth of India for over Five decades and there Nature of business is Supplier,
Manufacturer, Service Provider.

2.4 Geographic Area

With regional offices all over India in States of Haryana, Uttaranchal, Delhi &
Maharashtra
Tractors Manufactured by escorts Ltd. are sold not only in India but in other
countries also or over 41 countries of the GLOBAL MARKET, like


USA
CHILE
SENEGAL
TANZANIA
GHANA
SOUTH AFRICA
SRILANKA
POLAND

3.2 Vision and Mission

Through the power of Imagination in engineering we creates solution that
helps our customers, be more productive.
Mission of ESCORTS is:
Engineering Changes through core competency for greater synergy reinforcing
bonds with customers & establishing powerful symbiotic relationship with
international allies, preparing global market. The company wants to make a
lasting difference to its shareholders, its customers, its business associates, its
employee and the country as a whole. The company also gives better quality and
better technology to customer and treats every customer as special to build
respect for, and loyalty to, Escorts.

3.3 Product & Services by Agri-Machinery Group

Escorts is one of the largest tractors manufactures of the country. It is one of the
leading AMG & produces tractors in the 27-75 HP range. Its manufacturing
capacity is 1.2 lacs per annum & has already sold tractors more than 1 million.

Tractor:A tractor is a self operating machine which provides traction for itself & power
to operate tools and other agricultural & non agricultural equipments attached to
it.
According to Oxford dictionary the word Tractor was first used in 1856 in
England as a synonym with engine. The term Tractor appeared in an 1880
U.S.A. patent for track laying steam traction engine.
Traction:

It is a Force in the direction of travel.

Developed by the traction medium (Soil) & is transferred to the traction

The engine developed power, at the end goes to the traction wheels which makes
it able or allows it to move the tractor with or without load.

The speed gets reduced, due to the slip that occurs during the movement of
wheels.

With increasing load the slippage also occurs.

Use of good tyre tread increases the traction.

By adding weight of case iron and water ballasting, the weight can be increased
for good traction.

Introduction of Tractors
Predates independence humans were used in place of Bullocks for showing &
agricultural activities. After that Humans were replaced by Bullocks. With the
passage of time the first Tractor with steam engine developed. In 1961 Escorts
started manufacturing tractors in collaboration with URSUS of Poland. After
that with modernization & large competition in the market several ranges of
tractors were developed to fulfill the needs of farmers.

WHY ESCORTS TRACTORS ARE BETTER CHOICE?

Escorts Tractors are considered as a better choice by the farmers they provide
quality assurance to the farmers. Escorts AMG worked on the or uses the world
best methodologies of BPR. Its different range of tractors has been developed
from proven reliable design. It is even upgraded to meet the demands or
requirements of the farmers for greater output & reliability. Escorts Tractors are
also considered best because they are designed keeping in mind the demand or
requirements or needs of the farmers for their welfare. Also Escorts got the
award for its quality product.
PRODUCT RANGE

Escort
A Tradition of Trust
Savers

Powertrac
The super diesel

Farmtrac
The World Champion

Escort (A Tradition Of Trust) Economy Range

27-35 HP Category

This was the very first range of tractors introduced by Escorts. The Escort range
of tractors has a tradition of service & trust behind them as they give quality
assurance. They are the farmers friends.
Powertrac (The Super Diesel Savers)-

Value Range 34-55 HP

The Powertrac range of tractors is designed to give spectacular diesel economy
i.e., a striking or very impressive performance.
They are biggest friends for farmers as they can be used during rising diesel
costs. This range of tractors are perfect for the entire Indian farming community
& their prosperity as it takes or needs or uses less diesel compared to its other
previous ranges.

Farmtrac (The World Champion)

Premium Range 34-75 HP

In tractor technology, the Farmtrac range is the ultimate icon having a no. of
features. This range provides a huge no. of features for scientific farming &
other applications. It is a machine packed with powerful features for providing
maximum efficiency.

The top line of the company arises from four main verticals, namely: - the
agricultural machinery segment, the material handling and construction
equipment segment, the railway equipment segment and the auto suspension and
ancillary products segment. The company also derives a minor source of income
from its stakes in various companies located in India and abroad. Examining the
historical performances of all these segments, it is quite clear that the
agricultural machinery segment is the major driver of revenue. Historically that
segment has contributed around 72% of the companys total sales (sales from
FY11-FY12).
This division of Escorts commenced operations in 1964 with the manufacturing
of tractors being the key activity. Currently the manufacturing of tractors takes

place in their Faridabad plant which churns out on average, around 260 tractors a
day, in two shifts.
However this facility has a manufacturing capacity of 400 tractors a day, with
that level being reached only during peak periods.
The Escorts brand of tractors is immensely popular amongst the farming folk in
the country, particularly in the northern territory. This statement is best
exemplified by the fact that every third tractor in the country is an Escorts
tractor. Principally Escorts offers three tractor brands namely: - Powertrac,
Farmtrac and the eponymous Escort. The Powertrac brand is the utility and
value-for-money tractors that functions on horsepower ranging from 34 to 55.
The Farmtrac brand is the premium tractor that functions on horsepower ranging
from 34 to 75 while the Escort tractor brand is the economy tractor that has
twin-cylinder engines with horse power ranging from 25 to 35.Out of these three
brands, the Farmtrac brand is the most popular, accounting for 50% of the
companys total sales. The Powertrac brand is not far behind, accounting for
48% of total tractor sales while the Escort brand only accounts for 2%.
In addition to India, the company exports tractors and other farm equipment to
more than 40 countries. Construction equipments serve as the second largest
contributor of Escorts sales, attributing for around 15% of the companys total
turnover. As part of this segment, the company manufactures and markets a
diverse range of construction and material handling equipment such as cranes,
loaders, vibratory rollers and forklifts. The company has managed to garner
quite a reputation through this segment as it is the worlds largest manufacturer
of Pick-n- Carry cranes with that item generating more than 60% of the
companys construction equipment sales. It also has a strong presence in the
manufacturing of compactors which contributes another 25% of the total
construction equipment sales. The remaining part of the companys bottom line
arises from the equipment division, which is further divided into the railway
equipment division and the auto equipment division. Traditionally both these
segments havent contributed an awful lot to the companys total turnover
(approximately around 8% over the last three years). Escorts is one of the oldest
suppliers of high-tech equipment to the Indian railways, having commenced that
relationship in 1970. The products of the railway equipment division are also
exported to over 15 countries worldwide. As far as the auto equipment division
is concerned the company has quite a strong presence in the country with an

aftermarket of 300 dealers, 1000 retailers and 20000 workshops/garages.

The company is considered to be a pioneer in the manufacture of automotive
shock absorbers, having produced that product for two wheelers and fourwheelers since 1966. Its auto division too is quite efficient with a manufacturing
capacity of 5000000 units per annum. The company also follows a wellbalanced market mix of its auto manufacturing parts, with 60% accounting for
domestic sales while 40% accounts for exports. The companys commitment to
research and development is best exemplified through the Escorts Institution of
Farm Mechanization, a research institution located in Bangalore, and set up
with the objective of enhancing the agricultural productivity and quality of life
in rural India. Through this institution, the company is constantly striving to
develop farmer friendly and fuel efficient products.

Ecorts Popular Tractor Models

Farmtrac 65EPI
Farmtrac Champion
Farmtrac 45
Farmtrac 70
Farmtrac 60
Farmtrac Hero

Services Offered
The company makes its every effort for continuously improving and for meeting
the ever -rising expectation of its customers at the lower cost. The company tries
to fulfill the need of its customer, both internal and external with the highest
degree of commitment thereby creating a quality organization geared to ensure
total customer satisfaction and the continuous health and prosperity of the
business.

Customer Orientation: To fulfill the requirement of the internal and external

customer of the company.

Process Orientation: To optimize and harmonize interrelated process rather

than individual function.

Preventive Behavior: To prevent the mistake to happy the customer.

3.4 Distribution Network

A Channel of Distribution (sometimes called a marketing channel) is a group of
individuals and organisations that direct the flow of products from producers to
customers.
In its broadest sense this function includes transportation as well as the
middlemen who handle the goods and help to transfer title to the goods. The
term channel of distribution is used to denote the middlemen engaged in
moving goods form place of production to the used to denote the middlemen
engaged in moving goods form place of production to the place of consumption.
This is risky. This is in fact is a 'channel' through which goods are made to move
as smoothly as possible to the desired places.Channels of distribution are the
means employed by manufacturers and sellers to get their products to market
and into the hands of users. Channels are management tools used to move goods
form production to consumption, they are means by which title to goods is
transferred from sellers to buyers. The process of transferring title is not so

simple especially in present day markets that are characterized by heterogeneity

on both the demand and the supply sides. This means that there is a wide variety
of goods produced for sale, while on the other side, there are highly varied and
complex desires of consumers.
In addition to having a strong sales function companies should also minimise
their Selling & Distribution Overheads as these can be minimised, companies
should also have efficient distribution channels to make the products available to
the end consumer. Management of distribution channels involves efficient
channel design, conflict management and implementation of sophisticated
channel information systems which will enhance the process of making the
products available to the end consumer in a timely manner.
Thus, Sales and Distribution Management provides an overview of the sales and
distribution function. It discusses various aspects of the sales function ranging
from various sales organization structures to the role of the sales manager in
improving sales by hiring, training, motivating and leading the sales force. It
also provides the distribution function and discusses logistics and channel
management.

IMPORTANCE OF DISTRIBUTION CHANNEL

As we know that a channel of distribution is a group of individuals and
organisations that direct the flow of products from producers to customers. A
channel of distribution performs a no of functions:

Transfer of title of the goods involved

Physical movement from the point of production to the point of consumption

Storage functions

Communication of information concerning the availability, characteristics and

price of the goods in transit, inventory and on purchase

Marketing creates various utilities to the products. Most of these utilities are, in
fact, created by performing the functions of physical distribution promptly and
efficiently.
The importance of these functions varies depending upon the nature of the goods

themselves. Thus, the company or organisation must find a correct distribution

channel for its product. It is always said that an organisation must find a right
product for its customer instead of finding a right customer for its product.
Agri machinery group is selling there tractors through various channels.
Escorts group is having 16 Regional Offices all over India and hold 2100
Managers all over India.

3.5 SWOT Analysis

3.5)

(figure

STRENGTH

WEAKNESS

Good
contacts
networking.

successful

Positive Attitude,Self Discipline

Lack of work Experience

Good relationship with customers

The time duration could not provide

Successful marketing strategies

Reputation for innovation

sufficient opportunity to study every

detail of Sales and Distribution
management of the company

OPPORTUNITY

Golden time for experience of

Market.

THREAT

Loyal customers

Pull and down competition.

Competitors with better job hunting

Strong Network.

High work pressure due to less

Number of Workforce

skill.

Competitors have a similar product

Competitors have launched a new

advertising campaign

3.6 Competitor Information

MARKET SHARE OF MAJOR PLAYERS

(fig 3.6)

(figure3.6)

The market shares of the top four players in the Indian tractor industry did not
change much during 2009-10 in comparison with 2008-09. M&M remained the
market leader with around 41.1% market share, followed by TAFE with a market
share of around 22%, Escorts with around 12.1%, and International Tractors
(ITL) with around 8.9%.
M&M remains particularly strong in the southern region (50.4% market share
during 2009-10). However, L&T John Deere (LT-JD) was able to increase its
market share in the region by around 250 bps in 2009-10, mainly at the expense
of M&M and Escorts. In the western region too, LT-JD performed well in 200910, increasing its market share by 190 bps, even as TAFE lost market share by
around 90 bps there.
In the northern region, where M&M has been traditionally weak, the company
increased its market share by 140 bps during 2009-10, even as ITL and Escorts
lost market shares by around 90 bps and 60 bps respectively, there. In the eastern
region, M&M was able to raise its market share by around 140 bps in 2009-10 at
the expense of Escorts and TAFE.

Top 2 Competitors of Escort Agri-Machinery Group.

Mahindra & Mahindra (M&M)

Tafe
Mahindra & Mahindra
Mahindra & Mahindras Farm Equipment Sector (FES), a part of the U.S. $14.4
billion Mahindra Group, maintained its leadership position in the tractor industry
in FY 2011 - 2012. Domestic sales in FY2011-2012 stood at 221730 units, as
against 201785 units during FY2010-2011, having registered a growth of 10%.
Total tractor sales (domestic + exports) in the financial year stood at 235452
units, as against 213653 units for the same period last year. Exports for financial
year ended on March 31, 2012 stood at 13722 units, having registered a growth
of 16%.
For the month of March 2012, the total sales stood at 17405 units. Exports for
the month registered an impressive growth of 33% at 1485 units the farm
equipment
division
of
Mahindra
HYPERLINK

"http://en.wikipedia.org/wiki/Mahindra_%26_Mahindra"
HYPERLINK
"http://en.wikipedia.org/wiki/Mahindra_%26_Mahindra"
HYPERLINK
"http://en.wikipedia.org/wiki/Mahindra_%26_Mahindra"&
HYPERLINK
"http://en.wikipedia.org/wiki/Mahindra_%26_Mahindra"
HYPERLINK
"http://en.wikipedia.org/wiki/Mahindra_%26_Mahindra"
HYPERLINK
"http://en.wikipedia.org/wiki/Mahindra_%26_Mahindra" Mahindra, builds and
sources tractors that are sold worldwide across six continents. In 2010, Mahindra
became the number one selling tractor in the world. Mahindra has a huge
consumer base in India, China and America and a growing base in Australia. The
company builds more tractors in India than any other manufacturer, and has the
capacity to build 150,000 tractors a year. In 1963, M&M formed a joint venture
with International Harvester to manufacture tractors carrying the Mahindra
nameplate for the Indian market. Armed with engineering, tooling and
manufacturing know-how gained from this relationship, M&M developed its
first tractor, the B-275. Mahindra Tractors with sales of nearly 85,000 units
annually is one of the largest tractor companies in the world, and is number one
in sales in India - the largest tractor market in the world.

Tractors and Farm Equipment Limited (TAFE)

Tractors and Farm Equipment Limited (TAFE), a US $1.6 billion tractor major
incorporated in 1960 at Chennai, India, is the third largest tractor manufacturer
in the world and the second largest in India by volumes, with a 25% market
share of the Indian tractor industry and a sale of approximately 150,000 tractors
(domestic and international) annually. TAFE's partnership with AGCO
Corporation and the Massey Ferguson brand for 52 years is an outstanding
example of TAFE's
commitment to its values of building long-term relationships with its stakeholders,
through fair and ethical business practices. In the Indian market, TAFE has earned the
trust of its customers through its wide range of products that are known for high quality
and low cost of operation, backed by over 1000 strong distribution network that

effectively supports its three tractor brands of Massey Ferguson, TAFE and Eicher. TAFE
exports tractors in partnership with AGCO and independently, powering farms in over 82
countries including developed countries in Europe and the Americas. Besides tractors,
TAFE and its subsidiaries have diverse business interests in areas such as farm
machinery, diesel engines, batteries, transmission components, panel instruments,
engineering plastics and hydraulic pumps and cylinders. From a small beginning with just
one tractor model in 1961, TAFE today is recognized as a high quality mass manufacturer
with an extensive product range to meet every farming need, innate engineering
strengths, uncompromising focus on quality and an immense fund of experiential
knowledge gained through designing, developing, manufacturing and supporting tractors
that are synonymous to reliability and ruggedness. TAFE's R&D facilities are centers of
excellence, renowned for their innovative design and engineering expertise, and have
been recognized by the Department of Scientific & Industrial Research, Ministry of
Science and Technology, Government of India. Extensive research and testing ensures
that TAFE's products and aggregates meet its exacting performance standards.

3.7 Growth Rate and Market Share

On July 2004 Escort s AMG (Agri Machinery Group) recorded a strong sales
growth of 113 per cent. The Indian tractor industry, which grew 50.6 per cent
during April-May 2004 helped Escorts garner over five per cent market share.
Escorts Limited has registered a 20.80% increase in sales in the first quarter of
fiscal 2009-10 ending December 31, 2009 on September, 2010.
Trend towards high HP Tractors
The proportion of higher power (greater than 50 HP+) segment has shown increase
in total industry volume share by 380 bps from 12.6% in 2007-08 to 16.4% in 20092010 to 18.2% in 2011-12. The Companys Revenue of Rs 3,942.8 crore in 20092010 as against Rs 3,279.8 Crore in 2010-2011. The Tractors Volume Came down
by 4.3 per cent to 60,673 in 2009-10 from 63,420 in 2010-2011. Tractors volumes
on Full Year at 5,311 in FY12 as that of 6,244 in FY11.

This shows that the liquidity of the company has improved, interest costs have
fallen substantially and the debt equity ratio is attractive. The company is
consistently enhancing shareholder value through growth initiatives, fiscal
prudence and innovative strategies. We are leveraging our ability to engineer

technology to chart growth path that spans a wider canvas of economic activity
across agriculture and infrastructure sector.

3.8 Key Challenges

Although every effort has been made to collect the relevant
information through the
sources available, still some relevant
information could not be gathered.
Busy Schedule of Concerned Executives: The concerned executives were
having very busy schedule because of which they were unwilling to give
appointment.

Time: The time duration could not provide sufficient opportunity to study every
detail of Sales and Distribution management of the company.

Unawareness: Executives were unaware of many terms related to study while

asking to them.

Confidential Information: As the company on account of confidential report

has not disclosed some figures. Moreover, in some cases separate accounts of
division are not separately maintained thereby, leading to restrictions in study.

Chapter 4
organization

Relation

with the

4.1 Industry Structure

The tractor industry of India is oligopolistic. 4 key players Mahindra &
Mahindra Ltd. (M&M), Tractors And Farm Equipment Ltd. (TAFE), Escorts
Ltd. (EL), John Deere (JD) rules over the market while a couple of players in

the unorganized sector, specialize in used tractors. Nine companies manufacture

tractors in the country in the product range, from less than 20 to 60 hp. Sales are,
however, concentrated in the 20-50 hp segment owing to the small size of land
holdings in the country. Mahindra and Mahindra is the leader in the industry
with a market share of 27 per cent. All the nine companies have had a presence
in the industry for more than two decades and have assimilated technology from
their collaborators. Product differentiation is minimal in the industry which has
resulted in market shares being fairly evenly distributed among the nine
manufacturers.

Performance of different tractor segments:

Range

21-30 HP

31-40 HP

41-50 HP

Sales (nos.)

57,915

146,742

146,742

% of Total
Sales

22.7

57.4

15.7

Market
Leader

M&M,41%

M&M, 26%

Escorts,
46%

Second

TAFE,34 %

TAFE, 26%

M&M, 35%

It is clear from the above that in the 21-30HP range M&M

remained the
market leader accounting for 41% market share followed by Tafe with 34%
market share. In the 31-40HP range M&M is the leader with 26% market share
and TAFE followed it by 26% market share whereas in the 41-50HP range
Escorts remained the leader with 46% market share and M&M followed it by
35% share. The existing players and the new entrants are now looking at
capacity expansion in the medium and higher HP segments since these are the
ones with the highest growth potential.

Tractor sale across region

The biggest markets for the tractor industry include States like Uttar Pradesh
(UP), Andhra Pradesh (AP), Madhya Pradesh (MP), Rajasthan, and Maharashtra,
which together accounted for around 50% of the total tractor sales in India

during 2009-10. The tractor industry witnessed a strong y-o-y growth of 28.3%
during 2009-10, with most of the States reporting positive growth during the
year.
(figure 4.1)

Northern Region
The northern region remains the largest tractor market in India with sales of
around1,67,000 units as of 2009-10. This region reported a growth rate of 35.7%
in volume sales in2009-10 over the previous fiscal, with the key contributors
including UP, Punjab. The northern region benefited from higher MSPs (for
crops), limited availability of labour (forcing higher mechanisation), and
increasing non-agricultural use of tractors.

Eastern Region
In the eastern region, tractor volumes continued to report strong growth in 2009-10
a small base, and went up by 53.8% over 2008-09, being driven mainly by the
higher MSPs announced for paddy. Within the region however, many financiers
remained reluctant to finance tractor purchases in some States like Bihar.
Nevertheless, in Bihar, tractor volumes grew 66% over 2008-09 to around
29,000 units in 2009-10, thereby accounting for over 50% of the total sales in
the eastern region. The Bihar market, where tractor penetration had been low
historically, has shown sustained growth over the last few years and become one
of the important markets for the tractor industry. Overall, in the eastern region,
growth in tractor volumes is expected to moderate, going forward, as the benefit
of a low base get diluted gradually.

Western Region
The western region reported sales of around 92,000 tractor units during 2009-10
a growth rate of 35.7% over the previous fiscalbenefiting particularly from
the strong performance that Maharashtra, Gujarat and MP posted during 200910.

Southern Region
In performance of the Southern region in terms of tractor sales was relatively

modest during 2009-10, with the growth rate being around 11.9% over the
previous fiscal. While most States in the region reported healthy growth, AP,
which is the largest tractor market in the south, de-grew by 10.4% in 2009-10.

State Wise sale of Tractors

Punjab, Uttar Pradesh and Haryana were the first States to benefit from the
Green Revolution and hence have traditionally accounted for most of the
tractor sales. However, given the high penetration of tractors in these Northern
States, the geographical concentration of tractor sales is gradually shifting to the
Western and Southern States of the country. States like Gujarat, Andhra Pradesh
and Madhya Pradesh have reported significant increases in tractor volumes over
the past three years. This trend is continuing in the current fiscal also, as the
intensity of tractor in North India is quite high already. Table 5depicts the
distribution of tractor sales in the country in the first quarter of the current fiscal
vis-a-vis the like period previous year.
The biggest markets for the tractor industry include States like Uttar Pradesh
(UP), Andhra Pradesh (AP), Madhya Pradesh (MP), Rajasthan, and Maharashtra,
which together accounted for around 50% of the total tractor sales in India
during 2009-10. The tractor industry witnessed a strong growth of 28.3% during
2009-10, with most of the states reporting positive growth during the year. The
performance of the southern region
in terms of tractor sales was relatively modest during 2009-10 with the growth
rate being around 11.9% over the previous fiscal. While most States in the
region reported healthy growth, AP, which is the largest tractor market in the
south, de-grew by 10.4% in 2009-10.The market shares of the top four players in
the Indian tractor industry did not change much during 2009-10 in comparison
with 2008-09. M&M remained the market leader with around41.1% market
share, followed by TAFE with a market share of around 22%, Escorts with
around 12.1% and International Tractors (ITL) with around 8.9%.