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May 16, 2002 | 0720 IST
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Tractor firms set to slug it out in US

V Phani Kumar

Leading Indian tractor manufacturers, who have so far been battling fiercely in the shrinking domestic market, are now on course to battle it out in the United States, which is fast emerging as the favourite export market for the local manufacturers.

Mahindra & Mahindra, Tafe, Punjab Tractors and Eicher, among others, are all now aggressively targeting the "hobby-farmers" or "sun-downers" in the US, to sell tractors for non-farming applications.

The segment, which is currently 60,000-80,000 units large and growing at 8-15 per cent per annum, comprises of tractors in the below 70 hp range, where Indian manufacturers have a definite edge over multinationals like John Deere and the Japanese major, Kupota.

While M&M, currently the largest exporter to the US, registered a 53 per cent growth to around 5,000 units during 2001-02, Tafe and Eicher, among others, are hoping to achieve a significant rise in exports this year.

Sources at M&M said Indian companies have lately started nibbling away at the market share of the dominant US and Japanese companies in the hobby-farming segment.

R C Jain, head of Eicher's tractors business unit said, "Indian companies have an edge in pricing over other American, Japanese and Korean companies.

Collectively, Indian manufacturers have the potential to garner at least a 30 per cent share of this market."

Mallika Srinivasan, director (operations), TAFE, said, "There is definitely a lot of potential in exports to the US, especially in the hobby-farming segment. Last year we exported around 1,000 units, which we plan to increase to 2,000-3,000 units in the coming years."

The hobby-farming segment in the US comprises of part-time farmers, who operate the tractors for only about 100-200 hours a year, against over 1,000-2,000 hours in the regular farming segment.

The US farmers, who use tractors in the over 120 hp range for regular farming applications, use these lower-hp tractors primarily to augment their farm income.

Indian manufacturers are developing newer models exclusively for exports to the US, keeping in view the stringent emission norms required in the US, in addition to the better safety and comfort features demanded by the hobby-farmers.

Currently, many new models developed by Indian tractor companies are in the development stage or are undergoing testing. These include a 80-hp tractor from Punjab Tractors, and a 61 hp and 70 hp tractor from Eicher.

M&M, which is developing a new generation of tractors under two new platforms - Horizon III and Horizon IV - also sources tractors from its South Korean partner Tong Yang Mulsan, and sells them under the Mahindra brand name.

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