Farm machinery and construction equipment major Escorts Kubota Ltd is gunning for the number two spot in the Indian tractor market by combining the Indian firm's cost competitiveness with the Japanese partner's technology and quality strengths as part of its future plans, according to its top officials.
The company, formed after Japan's Kubota Corporation acquired a majority stake in Escorts Ltd in a multi-structured merger deal announced in 2021, is working to finalise a mid-term plan (MTP) for up to 2031 with a slew of products planned to be launched, Escorts Kubota Ltd (EKL) Chairman and MD Nikhil Nanda and Deputy MD Seiji Fukuoka told PTI in a joint interview.
"In the next four to five years between the three brands -- Farmtrac, Powertrac and Kubota -- I think the success is going to come from the new products that we are going to be launching. Lot of work has happened, and a lot of product lines are planned for introduction between now and the next five years...," Nanda said responding to a query on the road ahead.
These products are for domestic as well as international markets and for different applications, and also for the construction business as well, he added without elaborating details.
"Product planning, innovation and development is going to play an extremely important role for the kind of growth that we are envisioning," Nanda said.
When asked about the company's growth ambitions, Fukuoka said,"In the domestic market, our first target would be to get to number two position. Presently, our market share is somewhere between 12 to 13 per cent." EKL is a distant fourth in the Indian tractor market that is currently led by Mahindra-Swaraj combined with around 40 per cent share. TAFE and Sonalika are the other players in the top three, he noted.
In FY25, tractor retail sales were at 8,83,095 units as against 8,92,410 units in FY24, according to Federation of Automobile Dealers Associations (FADA) data.
Both Nanda and Fukuoka declined to put a timeline to their target to become the number two player in the Indian market reiterating that it is "an ambition for the future".
Fukuoka, however, said as the Indian market "is more of a mature or saturated market", the priority for EKL is to ensure its products "get selected by the customer before the competition".
In order to achieve that, he said efforts are on to bring together the strengths of Escorts, which is cost competitive products and that of Kubota's technology and quality.
"Presently, we are thinking of putting Kubota quality in the low cost yet good tractor and putting it in the price sensitive market...If we end up putting the price higher because of the high quality, or make the price higher, then it will lose its value. So that is why, in this MTP, it is a very big theme on how to make good quality yet low-cost tractors," Fukuoka asserted.
He said as Kubota has been collaborating for the last five years now with Escorts, it has also learned "what are the points where we can improve the quality without increasing the price and that know-how will also be shared globally in order to contribute to Kubota's global growth".
In terms of network presence, Nanda said earlier Escorts was strong in North and West markets, while Kubota was strong in South and East. The coming together of the two entities has also helped in having a strong presence across India with over 1,500 plus dealers, Nanda said adding, "we still believe we have certain vacant spaces where we will be appointing dealers".
Fukuoka said recently top officials of Kubota's sales firm in the Americas, where the company has a strong sales network maintaining a high market share, came to India to share experience and advised EKL dealers "on what can be done" to increase market share.
On the export front, Fukuoka said, "By coming together as EKL now we are able to design tractors in India, procure things in India, and manufacture them in India and send them to the whole world through Kubota channels. This, of course, contributes to EKL's growth, but at the same time it also contributes to Kubota's growth." In Europe, he said Kubota has been able to recapture its market share in the compact tractor segment after introducing EKL's high quality and cost competitive product.
"This is something that is already a success story. We have been able to regain market share and similar things can be done in different markets. India made tractors can be sold through Kubota sales network, so that the sales company of Kubota can also get profit and EKL can also make profit," Fukuoka noted.
At present, exports account for 5 per cent of EKL's total sales and in the long term it is aiming to increase it to around 10-15 per cent.