Top tractormaker Mahindra & Mahindra Ltd (M&M) has indicated that three key segments will help the company achieve aggressive growth in the farm equipment business going forward. After an impressive performance in FY22 with market share gains amid some headwinds for the industry, the company is looking to increase its domestic share further this fiscal.

In FY22, the company sold a total of 354,698 tractors (under Mahindra, Swaraj and Trakstar brands), a marginal increase of 200 units over last year. FY22 volumes were the highest ever in any year. With a gain of 180 bps, the company’s market share increased to 40 per cent and for the 39th consecutive year, the company maintained its leadership position in the domestic tractor market.

“We have an aggressive growth strategy for the farm sector, driven by core domestic (growth in domestic tractor market share), growth in farm machinery and a quantum jump in global farm businesses,” the company said in its latest annual report. 

M&M bets on its two core tractor brands — Mahindra and Swaraj — to consolidate its leadership position in the domestic market. After the successful launch of the Yuvo Tech+ range of tractors in FY22, the company has planned a series of new launches to augment its tractor portfolio. It also intends to leverage technology on agro advisory and ecosystem services (offered through Krish-e: farming-as-a-service) to transform farming.

The company also seeks to strengthen its focus on farm mechanisation solutions. With increasing labour cost and scarcity, greater adoption of various forms of mechanisation is the way forward. As a result, the market for tractors and other farm equipment is expected to grow in the long term.

In FY22, M&M introduced new heavy rotavators and smart rotavators. Also, Swaraj Tractors launched CODE, a revolutionary mechanisation solution for horticulture farming. Going forward, Mahindra will continue to launch new implements and farm machinery through help from its Centres of Expertise in Turkey, Finland and Japan (where, over the years, it has developed footprints through strategic stakes and acquisitions). The idea is to bring all those products, engineered and further developed for Indian conditions and prices for the farmers. The company is also in the process of building a dedicated new factory at Pithampur to produce rice transplanters, potato planters and harvesters. 

Exports is also a major area for the growth of its farm equipment business. In FY22, the company’s farm equipment division recorded the highest ever volume and revenue by exporting 17,646 tractors — a growth of 65.5 per cent over the previous year, higher than the industry’s export growth of 45 per cent. This was driven by higher retails in several markets such as the USA, Brazil and various African and South Asian markets of Nepal, Sri Lanka and Bangladesh. The company has also made strides in exports towards tenders and bulk orders from markets like Benin, Guyana and Mali among others. 

New emission norms 

As the domestic tractor industry will transition to new emission norms BS TREM IV from October 1, the company said the shift to new norms is unlikely to be a major disruptor as it would apply only to tractors with engine capacity higher than 50 HP, impacting just about 10 per cent of the overall industry volumes. India remains a medium to high HP market for tractors with more than 90 per cent of the sales coming from sub-50 HP products. The implementation of new norms has been postponed multiple times due to the pandemic and other factors.