The Hindu Business Line : Same Deutz-Fahr plans a slew of launches

"Three multinational and two Indian companies could be the eventual tally,'' he said of the industry currently sporting 14 players and recovering from a sales decline.

Same Deutz-Fahr India, with an installed capacity of 8,000 tractors and 15,000 diesel engines, sold 1,500 tractors in 2003 and remains a marginal player in the domestic market.

In 2004, the company hopes to sell 4,000 tractors (450 sold in January/February) and 6,000 engines. On the anvil is export of 860 engines to Nigeria.

Over the next 6-10 months, new models in the 35, 40, 45 and 55 hp categories (including 4WD variants) are planned.

The company will introduce its Lamborghini tractors next year. Talks are on with International Tractors (maker of Sonalika tractors, has a collaboration with Renault), Indofarm (which currently uses a Polish engine) and two other domestic players (names not disclosed) to supply Deutz engines.

By 2006-2007, the company's Ranipet plant is forecast to produce 10,000 tractors, including 3,000 for export, the maximum output it can manage.

"We are not chasing numbers,'' Mr Bali said. Instead, the Italian tractor manufacturer - Indian operations are 100 per cent owned by the foreign parent - is focusing on segments of the Indian market that are upgrading or used tractors that proved inadequate given unique soil conditions.

Chosen markets include Punjab, Madhya Pradesh, Gujarat, Maharashtra and South India. Modest sales numbers usually thrust the onus of profitability on premium products and commensurate pricing. But Mr Bali claims no deviation from the ideal of good products at affordable pricing. The Ranipet plant's break-even is pegged at 5,000 units.

Same Deutz-Fahr India has aligned with State Bank of India (SBI) to provide tractor financing at low interest rates. SBI's existing and proposed ties cover 10 of the industry's 14 players.

It targets tractor funds of Rs 1,500 crore by next year, which at roughly 50-60,000 tractors is a 30 per cent market share.

Good rains and economic upturn have catalysed institutional funding for the farm sector but tractor sales are still limping back from a sales overdrive couple of years ago which clogged dealer pipelines.

Bank officials said that loan default is high in the segment.

Won't aggressive financing precipitate another market jam in the future? Mr Bali is optimistic - sectoral inventory is now reduced to 40,000 units though the healthy standard is 25,000.

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