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Mahindra & Mahindra eyes 50% of tractor revenues from overseas

Publication - The Hindu Business Line

Publish Date - 10 Apr 2019

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Source - KR Srivats

Word count - 403

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Edition - Online Web

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Language - English

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Mahindra & Mahindra — the largest seller of tractors in the world by volumes — expects 50 per cent of its overall tractor revenues to come from locations outside India in the next 5-7 years, a top company official said.

As on date, only about 33 per cent in value terms of annual tractor revenues comes from locations abroad.

“In the next 5-7 years, we should be at 50:50 mix between domestic and overseas share of revenues,” Pawan Goenka, Managing Director, Mahindra & Mahindra, told BusinessLine here on the sidelines of AIMA’s 5th National Leadership Conclave.

This (50:50 mix) will be achieved through part organic and part inorganic moves, he said, adding that the aim is “fairly ambitious”.

On farm equipments space, Goenka said that Mahindra & Mahindra was open to acquisitions. “In farm equipments, all the technology, acquisitions and new markets we enter are focused on fitting ourselves into farms that are less than 50 hectares.”

The focus will be to plumb deep in existing markets “rather than spread ourselves too thin.”

Auto focus

On the automotive front, Mahindra & Mahindra sees its passenger vehicles plant go operational in Sri Lanka in next two months. Mahindra & Mahindra will be the first Indian OEM to set up a passenger vehicle plant in Sri Lanka, according to Goenka.

On recent slowdown in automobile sales in Indian market, Goenka expressed confidence that the current demand slowdown will get reversed in the coming days.

As far as investments goes, Goenka said that the company would not shy away or compromise on investing in India. “We will also look at opportunities (for investments) outside India,” Goenka said.

Goenka said that Mahindra & Mahindra is now focused on consolidating its presence in markets where it already had a presence. “Our thrust will be in markets where we have good presence already through auto, tractors or Tech Mahindra. We will look to take our other businesses to do piggyback riding on brands already established. Mahindra Finance, solar, steel trading could be some examples of such other businesses”, he said.

In the last two years, Mahindra & Mahindra has expanded its global footprint significantly. Rather than sending and selling tractors and automobiles from India, this group has started doing CKD operations in many parts of the world.

“While Phase-I was all about establishing ourselves in markets, Phase-II is about investing in markets in terms of local presence in both offices and manufacturing. We will continue with our focused Phase-II approach,” he said.