Agricultural implements business has huge scope in India: John Deere
India is a big market for tractors which are in the 35 - 75 hp band and given the average land holding size in India, industry experts feel that it is unlikely to change anytime soon. However, what will change is the technology and solutions to make the tractors in this segment more productive
J Srikant | ETAuto | Jun 29, 2016, 07.55 AM IST
NEW DELHI: In a market like India, where higher HP tractors are not too popular, John Deere feels that there is a lot of opportunities in the implements business itself in the smaller to mid HP segments.
India is a big market for tractors which are in the 35 - 75 hp band and given the average land holding size in India, industry experts feel that it is unlikely to change anytime soon. However, what will change is the technology and solutions to make the tractors in this segment more productive.
"One such solution to make tractors more productive is addition of implements which is now increasingly happening in India, said Mukul Varshney, vice president, public affairs, John Deere. "The market for implements will grow exponentially in India as even OEMs are now planning to tap into the segment."
Indian implements industry, Varshney said, is still largely unorganised, which to a huge extent is impacting the efficiency of the tractors. "Implement manufacturing is highly dominated by unorganised players here in India. There designs are not very efficient in the fields which hamper not only the productivity per tractor but also waste a lot of fuel in the process"
He informed that germination level in India is only around 70-75 percent which is far lower than 85 - 95 percent seen in several other countries. "One of the ways to improve this is use well designed implements and now tractor OEMs are looking at the business of implements and are now partnering with third party with better precision."
In India, John Deere too is getting implements sourced from a third-party and then selling it under the brand Green Systems. Varshney, however, declined to comment whether they will look at manufacturing implements here in India going forward.
John Deere informed that the largest segment for them is the 35-45 HP category, but it has a leadership position in the above 50 HP category. Last year the American company produced around 70,000 units of tractors in India.
It claimed that it is the largest exporter of tractors from India continuously for the last thirteen years.
Another opportunity that lies ready to tapped by manufacturers in India, Varshney said, is in the renting of tractors business. "Renting is still through unorganised sector but it is slowly going the organised way. There is a huge potential for companies who wants to be present in this space."
John Deere said that it has already seen the industry on the upswing in the last six months, which it expects will continue through the year. "In the previous six months, sales have increased. In the last 12 months rolling, the industry sales have reached around 525,000 as compared to 480,000 units sold in last financial year. We expect the 12-15 percent growth to continue through this year."
However, the company does not see any need for investments for increasing its manufacturing capacity. John Deere has its plants in Pune and Dewas in Madhya Pradesh for tractors and at Sirhind, Punjab for harvesters.