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New Holland wheels into lower HP segment

Anand Krishnamoorthy

NEW DELHI, Dec. 12

AS part of its efforts to participate in the largest segment of the tractor market, New Holland Tractors (India) Pvt Ltd is planning to launch a 35-horse power tractor next year, a top company official has said.

Currently, the company has 70-HP, 50-HP and 42-HP tractors and the new launch will give it an entry into the 31 to 40 mid-HP segment, which accounts for 60 per cent of the overall tractor sales in India.

"With farm incomes slowing down, we wanted to be in this market, as farmers would probably not spend more on upgrading to a higher horse power tractor,'' Mr T.L. Palani Kumar, Managing Director, told Business Line. "We are currently doing field trials wi th the product and the initial response has been very good,'' he said.

New Holland Tractors (India) is a fully-owned subsidiary of CNH Global N.V., which in turn is a fully-owned subsidiary of Fiat SpA of Italy. CNH was earlier a joint venture between Ford Motor Co and Fiat SpA.

In a bid to expand its product portfolio, New Holland last year launched a 42-HP tractor, marketed as Chota Ford, targeting the small and medium landholdings category of farmers. "That product is doing very well,'' Mr Kumar said, adding that the company manages to sell about 200 units of the 70-HP tractor.

Asked why the company sees a need to progressively get into lower horse power segments, Mr Kumar said it was one of the options to make investments in India viable at a time when the market was not growing as anticipated. "If the market grew faster, then lower HP tractors were not needed. To make investments viable, we went to lower horse power tractors,'' he said.

Mr Kumar said the company was on course to achieve breakeven next year and start making profits after that. "When we sell 10,000 units annually, we will break even,'' Mr Kumar said.

New Holland, which has invested over $100 million in the Indian arm, is likely to end up selling about 4,500 tractors in calendar 2001 as against 5,000 units in calendar 2000.

Sales of most tractor manufacturers have been hit this year due to low farm incomes. "We were also hit by the fact that one of our suppliers had an industrial relations problem. That hurt us very much since that happened during the peak buying period,'' he said.

With new products in its portfolio, New Holland intends to sell 10,000 units in calendar 2002, and thus achieve breakeven levels.

Mr Kumar said the company was eyeing the market with some product extensions, such as sugar cane harvesters.