Indra’s Drishtikona (Viewpoint)

Rs 1-Lakh Tractor-A Wish Fulfilled

Posted : December 24, 2005 at 4:27 pm [IST]

SAS Motors made a headline with its introduction of the country’s cheapest tractor- a product sourced also from China- at Rs 99,000 in November 2004.I had been talking about a cheap tractor cheaper than Maruti 800 for a long time. It is the farmers’s need. However, I was a little skeptical with SAS. I thought it to be a gimmick of an entrepreneur with trading background. Like other Indian traders, SAS will bring in a cheap and substandard tractor from Chinese stable and market it to poor Indian farmers, who buy the tractors with loan against land they hold. And the tractor will hardly be reliable and robust enough to Indian conditions for rough handling adding one more problem to our farmers.

I don’t know much about SAS and how it fared since the introduction. I had some very shocking story sometime back about its test and approval from the authority. But once the business column of ‘Times of India’ has published a story saying, ‘Angad (the brand name of the tractor of SAS) scales the Great Wall. SAS Motors acquires state-owned tractor maker in China,’ it appears to be a serious manufacturing endeavor. SAS Motors makes entry-level tractors under brand name ‘Angad’. It has now acquired the 100% holding of a state-owned tractor-manufacturing unit, Laiyang Tractor in the Shandong province of China. The acquisition will give a cost advantage to SAS once it sources components from its Chinese company for its Indian manufacturing plant. It will provide it an access to the huge Chinese tractor market a well as it can use the Chinese plant to supply tractors to other countries in the region with good potential.

Interestingly, Mahindra & Mahindra- the top tractor manufacturer in India and aspirant of getting to the first five global ones also acquired a tractor firm in China by buying a major stake in Jiangling Tractors. Is it not the right strategy for the Indian manufacturing sector? M&M has all the strengths required to become the biggest manufacturer of tractors.And it is a company with special thrust on TQM unlike Chinese manufacturing companies. The Farm Equipment Division of M&M has won the prestigious Deming Application Prize awarded by the Union of Japanese Scientists and Engineers (JUSE) in 2003. Perhaps the Chinese can learn some lessons on quality management from these acquisitions from Indians.

Farmers must get a cheap but robust tractor that can run with bio-diesel as fuel. Our banks must show integrity to finance the farmers as cheaply as they do to the customers of passenser cars. M&M also must go in the entry-level tractors or even mini ones that may be useful in the fields for vegetables and medicinal plants or other nche requirements of the farmers. Can M&M take a project of Rs 1-lakh robust tractor for Indian farmers, so that most of the farmers can afford it and improve the farm productivity?

The government must also look into assisting in areas that need reform to cut down the cost. One such area is the cost of electricity. With perhaps super power stations such as one announced by Reliance Energy for its Dadri project, it may become reality. But there are many miles to go.

Can’t our tractor manufacturers produce a reliable machine in plenty at a price affordable enough for every farmer owning few acres of land? For record, as on today hardly 2% of farmers own one.

- Indra

Category: Manufacturing |