Oja and Target power Mahindra Tractors to new heights

When Hemant Sikka says Mahindra & Mahindra is going through “almost like a rocking year” in tractors, he is not kidding. “We always had an acceptable market share of 41% give or take half a percentage point here and there. With all the work done over the last few years and the tremendous effort put in by our teams, this number has really grown,” continues the President, Farm Equipment Sector, M&M.

Today, the company’s market share in tractors is nearly 44% and this gain is on the back of two very strong brands, Mahindra and Swaraj, which are “extremely loved” by the farming community. More specifically, these are Oja and Target, the “two young babies” which have come into the white space of lightweight small tractors.

“The good thing is that we are getting very strong market share in this 20-30 hp segment. Customers like our products and I am sure our numbers will keep growing from here,” says Sikka. The teams have also carried out “multiple actions” on service, quality, supply chain etc and all these efforts have led to this good showing.

The M&M leadership team had echoed these points at the third quarter Q&A session with analysts where they said the whole refresh and transformation “that we did of Swaraj" has gone through very well and very successfully. “We also had in the past some specific product gaps in the Swaraj portfolio. So, the last 1.5 years, that's got filled up pretty well,” they added.

Horsepower gaps

Target came into the 20-30 hp space where there was no appropriate offering till then. “There were a few other horsepower gaps. So, there was work on the product strategy done over the last 4-5 years on Swaraj which is playing out well,” said the management.

Between Target and Oja in the 20-30 hp space, M&M has gained substantial market share and is also beginning to see a positivity on the farm division side “out of the South and West markets which had a very long run of negative growth”. The company expects 15% growth in Q4 which will translate into a near 7% growth for the whole fiscal and take the industry to perhaps its highest number in recent times.

While Oja is a global platform, Target is meant only for India. Quite interestingly, the largest market for Oja is the US where the subcompact version was launched recently. This is specific only to the US along with a few other markets and is part of a new platform.

Oja goes global

Oja sales have also kicked off in Thailand which marks an opening for M&M in the ASEAN region. “In the next couple of months we will also start testing the product, which is termed the seeding phase, in Brazil and Australia,” continues Sikka. In India, M&M has launched seven versions of Oja in the 21-40 hp range at one go with more to follow over the next couple of years.

“We are mostly looking at Oja as a truly global platform which will open many doors for us. Western Europe is also one of our potential markets though we are yet to take a decision,” he says.

As for Target, M&M officials had said at the time of its launch a couple of years ago that horticulture was growing faster than food grains since it was in greater demand and generated more income to farmers. The people at the Punjab-based Swaraj Tractors understood this a lot better since their families had links with farming and there was a strong connection built up in the process.

Ideal fit

Target was seen as an ideal fit here since it was a lightweight tractor which worked well in fields where large tractors found it tough to operate. Prior to its launch, the company carried out over 1,500 sessions with customers to understand their needs and had them incorporated in the new tractor model.

This exhaustive study was carried out in eight States and it was clear to the Swaraj management that today’s farmers were way more progressive and aspirational than their predecessors, while being more willing to spend on a good product.

They wanted a machine that could carry out heavy spraying in tough conditions with comfortable seating. The other priority was to have multiple uses in different applications. Clearly, all this has paid off and Target, along with Oja, is literally blazing a new trail in lightweight tractors.

R&D centres, manufacturing locations

Mahindra Tractors, incidentally, has R&D centres in India, Japan, Finland and Turkey with manufacturing locations in India, Japan, the US, Turkey, Brazil, Finland, Algeria and Brisbane, Australia.

“As I speak, our Algeria plant is coming up very nicely. In fact, a big team of our workers is going there to set up the whole process of paint shop and everything else,” says Sikka. The following fiscal could also see the company making progress on its new Brazil plant.

The R&D people work very closely with each other and there is knowledge sharing constantly happening. “One thing I want to call out is the great work done by our team on rice transplanters,” he says.

This is particularly significant given the way paddy sowing is done by women in knee deep water. “They stand the whole day and it is one of the most difficult jobs to do,” adds Sikka. This pain is alleviated in a big way using a rice transplanter from Mitsubishi Mahindra Agricultural Machinery.

Enriching lives

These products have been imported and localised to suit Indian conditions and “we are very happy about the way they are transforming paddy sowing”. It also aligns very well with the core purpose of the farm equipment business which is to transform farming and enrich lives.

“Obviously lives are being enriched because you can almost finish half an acre in an hour. You do not have to stand but just walk behind. We are very much involved in bringing new technology at frugal prices for Indian farmers,” reiterates Sikka.

To that extent, this objective goes beyond just selling tractors and includes machinery, spares, sprayers for orchards and crop care products. The bonding with farmers is evident in the grapes business at Nashik where M&M has helped with exports to China, Europe and ASEAN. Places like Baramati have emerged as success stories in shipping grapes to China which are hugely popular among the locals.

Skill development

On the skill development side, many projects have been carried out with local state governments in India. There are 14 skill development centres run by M&M focused on mechanisation training. These are spread across Madhya Pradesh, West Bengal, Maharashtra and Chhattisgarh where people are being trained in farm machinery servicing,

“We are training rural folk to service tractors and farm machinery. There is so much demand that these people get absorbed by our dealers for their service network and some even by us. It is not only about giving training but almost like creating job opportunities,” elaborates Sikka.

Dealers need manpower to service a high population of tractors given that over 400,000 units come into the market every year between Mahindra and Swaraj. “We need many people to take care of them in villages. It is always good to have a local person who speaks the local language, who can live in the village and service our tractors,” he says.