Sunday, July 7, 2013

Ploughing got posh: A Ferrari for your farm?

Ploughing got posh: A Ferrari for your farm?

A Ferrari for your farm? That’s not a far-fetched dream. Encouraged by booming sales of luxury cars, companies are driving premium tractors into the rural market.

A Ferrari for your farm? That’s not a far-fetched dream. Encouraged by booming sales of luxury cars, companies are driving premium tractors into the rural market.

It's an old story that farmers from North India love their Mercedes almost as much as their mustard. According to a Confederation of Indian Industry-AT Kearney report, Punjab alone accounted for 2,870 units out of 10,870 imported cars sold in India in 2012. This included names like BMW, Mercedes and Audi. 

Today, companies believe they are right on the money by launching luxury tractorstargeted at consumers powered by rural wealth. Escorts Ltd is already selling Ferraritractors in India , while Italian manufacturer SAME Deutz-Fahr (SDF) Group, owners of the Lamborghini tractor brand, will be bringing a range of Lamborghini tractors to India by 2014. 

One of the first to get into the premium tractor market was Mahindra & Mahindra, India's largest tractor manufacturer . Back in 2011, it announced the launch of Arjun International, a premium tractor with a high-powered engine and air-conditioned cabin, priced at Rs 15 lakh. The boom in the luxury car industry — valued at $5.8 billion in 2011 and expected to treble by 2015 — encouraged international players to enter the high-end tractor market as well."India's interest in high-end products has been proved by the luxury car segment and we hope these tractors will catch the imagination of the farming community like luxury cars," S Sridhar, CEO of Escorts Agri Machinery said in an earlier interview to TOI. One of the oldest manufacturers of tractors in India, Escorts has signed a partnership agreement with Italian company BCS SpA to distribute Ferrari tractors in India. Rajan Nanda, chairman and managing director, Escorts Ltd believes that Indian agriculturists have evolved from being subsistent farmers to those with an entrepreneurial bent of mind. "Today's farmers are looking for equipment that is high on precision and output. Escorts wants to partner with this forward looking Indian farmer by bringing international technology and design standards to the Indian tractor market." 

Escorts is offering a 26 HP machine suitable for specialised farming, such as in vineyards and fruit orchards. Priced at Rs 8 lakh, it is already available in Maharashtra and is being targeted at Kolhapur, Sangli and Nashik districts. "The needs of orchard and vineyard growers are more advanced and the product will address them efficiently ," says Nikhil Nanda, joint managing director, Escorts Ltd.BSE 2.48 % 

Uday Mahajan says he was impressed by more than just the brand name of the 26 HP Ferrari tractor he bought. The farmer from Peth Vadgaon in Haat Kanagale tehsil of Maharashtra's Kolhapur district, among the first to buy the Ferrari tractor in India, researched the best options for his 40-acre paddy field. "I saw 20 different video clips before zeroing in on Escorts Ferrari ," says Mahajan, who paid Rs 6.5 lakh for the tractor and is pleased with the results. "It took half a litre of diesel to sow one acre of land. Had the sowing been done manually, I would have to assign six farm hands and pay them Rs 600 per day." He's particularly happy about the four-wheel drive which makes turning in confined spaces easier as well as the extensive attachments the tractor can accommodate. 

With its Lamborghini tractors, the SDF group is targeting rich farmers, high net worth individuals with farming interests and owners of golf courses , cricket stadiums and luxury resorts. Their machines are priced approximately Rs 10 lakh upwards abroad. Bhanu Sharma, managing director and CEO of SDF India Pvt Ltd, told a newspaper in April, "We are studying the market and may introduce some range of Lamborghini tractors in about a year." SDF already manufactures select Lamborghini tractor models in Ranipet , Tamil Nadu, for export to Europe and Malaysia. 

Harminder Singh, a SDF distributor from Bhogpur in Jalandhar district, believes his clients will be excited about luxury tractors. "Some of our farmers have rich NRI relatives who will be keen to invest, while others will just want to be the first to buy an exclusive, high-end foreign brand," he says. 

Luxury tractors aren't just measured by horsepower (HP) and other technical specifications, it's the customisation offered that sets them apart. Internationally, luxury tractors accommodate small workstations, and feature fridges or cool boxes and drink holders, sound systems and luxury trims, either in wood or leather. They even have leather steering wheels. 

While some distributors believe there is a market for luxury tractors in India, others are more cautious. According to the state farm departments, the number of tractors in Punjab and Haryana are about 4.43 lakh and 2.70 lakh respectively. Most of these are high horsepower and suitable for large farms, but since land holdings in both states have been shrinking over the years most machines are under-utilised . Tractors are used for about 400 hours a year in Punjab, far lower than the 1,000 hours per annum required to make them economically viable. 

For new entrants to make a dent in this already saturated market, dealers point out that local brand-building and an efficient after-sales service count for more than just a luxurious brand identity . American companyNew Holland Ford, one of the world's biggest manufacturers of tractors, launched in India in 1998. "Despite being a big foreign brand, initially we struggled to gain the confidence of farmers in Punjab and Haryana, who were unaware of our name," says a dealer. 

Manpreet Singh Bajwa, a farmer from Khaira Kalan village in Mansa district of south Punjab, says the tractor market is highly competitive. "Companies offer everything from free aftersales service to accessories to persuade farmers to trade in their old machines," he says. Jang Bahadur Singh from Jamshed village, Jalandhar district, is one of the area's biggest potato farmers. He is skeptical about the utility value of these fancy products. "I'd want to know whether rotavators, straw reapers and balers of large sizes can be attached and operated easily with these models," he says, revealing that while some farmers are already operating 90 HP tractors with air-conditioned cabins for drivers, parts and accessories that can be fitted to these tractors are not easily available in the market. "Farmers are not able to get the best output or the machines are under-utilised ," he says. 

(With Dileep Athavale in Pune and Nikhil Deshmukh in Kolhapur) 

Source : By Ikhhlaq Singh Aujla, TNN 

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