John Deere to focus on smaller tractor, increase production

John Deere to focus on smaller tractor, increase production

New Delhi: US-based farm and construction equipment maker John Deere plans to rejig its tractor business in India by focussing more on smaller segment and is looking to launch at least two models by 2011 in that category.

“We started our Indian operations by focussing on high power tractors of 50 Horsepower (HP) and above. So far we have continued with the trend. However, half of the Indian tractor market is in the 31-40 HP segment and we are now going to change our strategy to target that segment," John Deere Director (marketing and sales) Ravi Menon said.

The company is also ramping up production at its Pune plant in anticipation of increased domestic demand, as it targets over 7% growth in sales in the country this fiscal.

“The overall tractor industry sales are growing at 7% and we expect to grow more than that this fiscal in the domestic market," he said.

During last fiscal (November 2008-October 2009), the company sold 25,000 units in the Indian market, besides exporting another 10,500 units.

Menon said that the company is working to introduce new models in the 31-40 HP segment, starting with two 35 HP tractor variants by 2011 but did not give details on price points.

The company’s existing 35 HP model comes at a price of Rs3.6 lakh. John Deere’s Pune plant has an installed capacity of 45,000 units.

John Deere currently sells eight models in the country across various segments.

“Most of our current Indian sales are in the above 50 HP segment, where we command a market 40% share," Menon added.

The Indian tractor market was of 3.3 lakh units in 2008, of which the 50 HP and above segment had 7% share.

Commenting on production increase, he said last fiscal the capacity utilisation at the Pune plant was about 80%, and the company is aiming to increase it further but did not elaborate.

“Demand is likely to go up further this year as more money is reaching the farmers’ hands due to increase in minimum support prices," Menon said.

“Although domestic sales are expected to rise, exports from India are unlikely to grow over last fiscal’s 10,500 units as international demand is still low," he added.