#1Tractor Industry in India Present and Future - 1#2Indian Agriculture Vital Sector of Indian Economy 2#3AGRICULTURAL DEVELOPMENT Pre Green Revolution (Before 1960's) •Boost in the productivity growth of coarse grains and pulses per unit of land Green Revolution (Mid 60's to Mid 80's) •Expansion of arable area and rapid growth in productivity of wheat and rice •Expansion of agricultural research •Establishment of national infrastructure Post Green Revolution (mid 80's to 2000) •Continued growth in productivity through intensification of chemical and labor •Expansion of area under maize, cotton, sugarcane and oil seeds 3#4AGRICULTURAL DEVELOPMENT India - in the 4th stage of agricultural transformation Further diversification of cropping patterns from low value to high value crops such as fruits, vegetables, flowers and other horticultural crops for domestic consumption, processing and export Regaining Agricultural Dynamism a key goal of 11th Five Year Plan • Aiming to Achieve the sustained growth rate of 4 - 5% • Improvement in Farm mechanization 4#5INDIAN AGRICULTURE SECTOR Key sector of Indian Economy • Contributes 25% of GDP of the country • 13% of India's Exports • Second largest producer of rice & wheat in the world Largest producer of pulses • Fourth largest producer of coarse grains Second largest producer of vegetables, groundnuts & fruits • Current average growth rate: 2.2% 50#6Value Added (US$ million 180,000 160,000 The international league table 140,000 120,000 100,000 80,000 60,000 40,000 20,000 AGRICULTURE SECTOR - GLOBAL SCENARIO France Italy Indonesia Germany Korea, Rep. Spain Turkey Agriculture Value Added (1995, US$) Agriculture Value Added (% of Total) Source: World Development Indicators Iran, Islamic Rep. Russian Federation Thailand Pakistan Philippines Canada United Kingdom Mexico 6 30.00 25.00 20.00 15.00 10.00 5.00 0.00 Value Added (% of Total)#7INDIA - VISION 2020 Raising productivity & Rapid diversification in agricultural sector Total proportion of work force involved in agriculture to reduce from 56% to 40% Growth rate to reach 4-5 % from current average growth rate of 2.2% Agricultural based energy policy to focus on production of fuel oil & biomass power - could generate lucrative alternate markets for farm produce while reducing the country's dependence on imported fuels Accelerated acquisition of technology capabilities to raise productivity in agriculture, industry & services Sectoral composition of GDP to drop from 28% to 6% in 2020 7#8NEED FOR FARM MECHANISATION Reduction in work force Achieving sustained growth rate of 4-5% Farm mechanization Increasing productivity Agriculture based Energy policy 8#9Indian Tractor Industry Current Status - 9#10Indian Tractor Industry Largest in the world • 1/3rd of Global production • Positive Growth (CAGR) of 10% for last 4 decades 10#11Industry Status CAGR of 19.5% in last 3 years. • 2,92,908 tractor sale in nos. in 05-06 • Government focus on 4 % growth in Agricultural GDP 11#12Comparing agricultural GDP with tractor sales 30% 25% I I I 20% 15% 10% 5% 0% -5% -10% -15% -20% 2001-02 2002-03 I I I I 2003-04 Growth in agriculture and allied activites I I I I I Source: Central Statistical Organisation and CRIS INFAC Figure 2 0 I I I I I I I I I I I I I I I I I I I I I I 2004-05 2005-06 (E) 2006-07 (P) Change in domestic retail tractor sales 12#13Industry Status • Next 5 years expected to have CAGR of 5 to 7% (2010-11) • Domestic industry to reach a level of 3,50,000 tractors per annum by 2010-11 13#14Volume 100000 50000 400000 350000 300000 Domestic 259926 24117244464 250000 235829 216854 198557 189420 200000 181171 164309 160969 138057 150000 93-94- 94-95- 96-96 96-97 97-98 98-99- Year 04-05- 264790 227455 05-06- 06-07- 07-08- 08-09- 14 09-10- 2010-11- 350000#15• • • Exports Gaining acceptance in International Markets Exports grew by 55% CAGR in last 3 years. At 28,118 (2005-06) Major markets are USA, SAARC countries, Turkey, Malaysia and parts of Eastern Europe. • Export to reach a level of 60,000 tractors per annum by 2010-11. 15#16Volume 70000 60000 50000 40000 30000 20000 10000 0 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 Year Get 02-03 Exports 03-04 04-05 05-06 06-07 07-08 08-09 09-10 2010-11 16#17Volume 450000 400000 350000 300000 250000 189420 200000 164309 150000 138057 100000 50000 93-94 94-95 95-96 96-97 97-98 98-99 Total (Domestic + Exports) 259926 2411244464 1235829 216854 198557 99-00 Year 00 01-02 160969 292908 247531 191655 02-03 03-04 04-05 05-06 | 06-07 07-08 08-09 09-10 2010-11 17 410000#18Major Players MAJOR TRACTOR SALES IN MARKET MANUFACTURERS NOS. FOR SHARE 2005-06 MAHINDRA & MAHINDRA 85028 29.0% TAFE (MASSEY FERGUSON & EICHER) 66667 22.8% INTERNATIONAL TRACTORS LTD (SONALIKA) 32017 10.9% PUNJAB TRACTORS LTD 31396 10.7% ESCORTS 28297 9.7% JOHN DEERE 19951 6.8% NEW HOLLAND INDIA (CNH) 13214 4.5% HMT 7900 2.7% FORCE MOTORS 4461 1.5% MAHINDRA GUJARAT TRACTORS LTD 2749 0.9% VST (MITSUBISHI) 1228 0.4% TOTAL 292908 100% 18#19Manufacturer wise sales MAJOR TRACTOR SALES IN NOS. MANUFACTURERS APR'06 SEP'06 - SALES IN NOS. GROWTH OVER APR'05 - SEP'05 LAST YEAR MAHINDRA & MAHINDRA 50922.00 39371.00 29.3% TAFE (MASSEY FERGUSON & 38391.00 28323.00 35.5% EICHER) INTERNATIONAL TRACTORS 17090.00 13879.00 23.1% LTD (SONALIKA) PUNJAB TRACTORS LTD 15217.00 14667.00 3.7% ESCORTS 24864.00 9053.00 174.6% JOHN DEERE 8730.00 10398.00 -16.0% NEW HOLLAND INDIA (CNH) 8203.00 5875.00 39.6% HMT 2351.00 3016.00 -22.0% FORCE MOTORS 1904.00 1790.00 6.4% MAHINDRA GUJARAT 1213.00 1192.00 1.8% TRACTORS LTD OTHERS 3750.00 1800.00 108.3% TOTAL 172635.00 129364.00 33.4% 19#20160000 140000 120000 100000 80000 60000 40000 20000 0 HP Segment-wise 31-40 Hp 41-50 Hp 21-30 Hp F-00 F-01 F-02 F-03 F-04 F-05 F-06 > 51 Hn 20 20#21State-wise Others Orissa 3% 7% UP 16% Tamil Nadu 7% Maharashtra 7% Karnataka 9% Gujarat 9% Punjab 5% Haryana AP Bihar 6% 8% 4% MP 9% Rajasthan 10% 2,64,790 Tractors excluding exports 21#22HP WISE SEGMENT AND TRACTOR FEATURES TRACTOR CATEGORY < 30 HP AGGREGATE PARAMETER CURRENT FEATURES No. of Cylinders ENGINE Emission Vibration & Noise control 1-3 TREMIII Less Focus SFC improvement High Focus Aircleaner Wet HYDRAULICS FUTURISTIC FEATURES 2-3 Euro IIIA or higher High focus due to regulatory requirements Even higher focus due to higher diesel prices Wet Basic specs TT applications ADDC No std. Fitment provided ADDC QRC fitment Multiple outlet points for hydraulic usage 11-12" Clutch 91/4"-10" TRANSMISSION Brakes Dry 6.5"x3.5" Dry Dry 7"x4" Dry TRACTORS Ergonomics Less Focus on operator comfort High focus of operator control 22#23HP WISE SEGMENT AND TRACTOR FEATURES AGGREGATE TRACTOR CATEGORY 31-45 HP PARAMETER FUTURISTIC CURRENT FEATURES ENGINE No. of Cylinders Emission Vibration & Noise control 3 TREMIII Less Focus SFC improvement High Focus Aircleaner FEATURES 3-4 Euro IIIA or higher High focus due to regulatory requirements Even higher focus due to higher diesel prices Wet HYDRAULICS Basic specs Liftomatic Jerk Sensing feature TT applications TRANSMISSION Туре Gear shift Brakes Wet ADDC Not given do No std. Fitment provided Sliding Centre shift 6.5"x3.5" Dry ADDC To be offered as feature For jerk free operation QRC fitment Multiple outlet points for hydraulic usage Constant mesh Side shift 7"x4" Wet Ergonomics Less Focus on operator High focus of operator TRACTORS comfort Steering Mechanical control Power 23 25#24HP WISE SEGMENT AND TRACTOR FEATURES AGGREGATE TRACTOR CATEGORY > 45 HP PARAMETER CURRENT FEATURES FUTURISTIC FEATURES ENGINE HYDRAULICS TRANSMISSION No. of Cylinders Emission Vibration & Noise control SFC improvement Aircleaner Turbo Charger Basic specs Liftomatic Jerk Sensing feature TT applications Volvomatic Electrohydraulic system Type Gear shift Clutch Brakes Type Torque converter 3 TREM III Less Focus High Focus Wet ΝΑ ADD C Not given Selectively given No std. Fitment provided Not given Not given Sliding Centre shift Single/Dual 6.5" x 3.5"/7"x4" Dry ΝΑ Ergonomics TRACTORS Steering Cabin Less Focus on operator comfort Mechanical NA 4 Euro IIIA or higher High focus due to regulatory requirements Even higher focus due to higher diesel prices Dry To be offered as feature ADDC To be offered as feature For jerk free operation QRC fitment Multiple outlet points for hydraulic usage To be offered as feature To be offered as feature syncromesh Side shift Dual 7"x4" Wet TO be given as a feature for off high way applications High focus of operator control Power Cabin with/without AC 24 24#25Current trends in farm mechanization • • Increased Haulage / Non agricultural Application Secondary mechanization • Farmers with low land holding (2-4 acres) buying tractors • Tractor exchange increasing 25#26Drivers of tractor growth Primary Demand-Agricultural Growth Secondary Demand-Haulage Expansion / Extension of land-has not increased for last 20 years but is an immediate need • Water resources-growth only through exploration of ground water 26 26#27Drivers of tractor growth (Contd.) National policy on Water Resources - Interlinking of rivers - Major projects being undertaken by Government of India • Value addition in farming. -Maximize Yield -Shift from low to high value added crops 27#28Drivers of tractor growth (Contd.) • Attract Educated Youth • -ROI in farming to improve -Integration to world commodity trading -Increased mechanization Credit Money availability -Low rates of interest • Banks as Catalyst • • "India One" loan policy Proactive to avoid NPA's 28 28#29Farm credit disbursements and y-o-y growth (Rs billion) 2,500 2,000 1,500 1,000 500 0 2001-02 2002-03 2003-04 Agricultural credit Source: CRIS INFAC Figure 4 40% 35% 30% 25% 20% 15% 10% 5% 0% 2004-05 2005-06(E) 2006-07(P) Change in agricultural credit (per cent) 29 29#30Indian Tractor Industry - Future Trends 30 30#31INDIAN AUTO POLICY – KEY FEATURES Fully Liberalized, de-licensed Industry with 100% Foreign Direct Investment Permitted Progressively Reducing Fiscal Burden Fiscal Incentives for R&D Expenditure Tightening Safety and Performance Regulations Export Promotion, Encouragement to Brand India Policy Aims to (i) Establish a Globally Competitive Automotive Industry in India (ii) Double its contribution to the economy by 2010 and (iii) Make India global hub of automotive manufacturing. 31#32Automotive Mission Plan 2016 USD 145 Billion turnover by 2016. 10% contribution to GDP 25 Million additional employment. Focused action plan on - - Demand Creation, brand building & infrastructure - International Trade - Competitiveness in Manufacturing and Technology - - - Human Resource Development - Environment & Safety 32 32#33Goals of Automotive Mission Plan 2016 Employment (Mn) 40 Exports (USD Bn) 45 Turnover (USD Bn) Investment (USD Bn) 52 145 0 20 40 60 80 100 120 140 160 Values By 2016 33 33#34Tractor Testing Facility at CFMT &TI,Budni S.no 2 3 4 5 6 Test facility PTO Hydraulic Drawbar Steering Effort Brake Vibration 7 Noise 8 9 10 Others Haulage E mission Test equipment Fully Air Conditioned Chamber for PTO test. PTO Dynamometers 1.Eddy Current Dynmo Fuchino Make (Japan) -Capacity 700 K W 2.Hydraulic Shenck Make Germany Dynamometer Capacity 1100 KW 1. Manual Hyd rig 2. Automatic Hyd Rig -- Japan Automatic Load Car, Equipped with 5th Wheel, Dynamometer, Load Sensor, Generator, Software for Calculation of Pull & power Oval Shaped Cemented Test Track 0.6 Km Sushma make Steering Torque tester with Auto matic Brake Effort Measurement System equipped with Wheel & software to measure de acceleration, force, speed & distance traveled with print out. 1.Mechanical Vibration measurement System for Displacement measurement 1.Noise Meter Bruel & Kajer 2. Cygnet Sound Level meter 2021 3.Automatic Anemometer for Wind Velocity 1.Ramp. 12? 15? 18? for Aircleaner & parking Brake testing 2.Roller Test bed for Water Ingress testing 3.Weighing Bridge for Tractor Reactions. 4. Generator --one set 4 km metallic test track AVL Emission Lab --Complete ( Under Commissioning ) 34 =4#35National automotive testing and R&D infrastructure project (NATRIP) is India's first comprehensive initiative to equip India with state-of-the-art automotive testing, homologation and pre-competitive/generic R&D Infrastructure to meet national requirements up to 2015. 35#36Key Benefits of NATRIP Creation of infrastructure to enable the Government to introduce global Vehicular Safety, Emission and Performance standards Encouraging larger value addition within the country leading to higher sectoral contribution to economy by way of revenues and employment. Facilitating development and mass production of high technology driven, affordable and globally acceptable Automotive products De-bottlenecking exports of Automotive products 36#37CHALLENGES FOR TRACTOR INDUSTRY..... 37#38BUYING CAPACITY Transfer of average age of tractor buyer from the age group of above 40 to young people Increasing demands Higher expectations on comfort levels Importance for styling and appearance • Better finish (Paint finish like cars) Importance for brand identities • Fuel economy Awareness about latest technologies • Likes on new models Higher life - resale value 38#39NEW PRODUCT DEVELOPMENT • Rapid proto typing - Component development Engine Performance - Power train research & development Styling - Availability of latest software and technologies Accelerated testing techniques reduce the development lead time to help industry to introduce new models in shorter periods 39 39#40NEW REGULATIONS Emission Regulations in near future Bharat TREM IV/EURO 3/US TIER 3 Homologation test facilities Dedicated Engine development test cells and research labs • Accelerated durability test rigs Engine performance improvement 40 40#41NEW REGULATIONS NOISE/SAFETY/OTHER REGULATIONS NVH Center of Excellence - - - Availability of Anechoic chambers Quiet rooms for subsystem level development Latest software tools for NVH Specialized Test tracks Center of Excellence for passive safety - Roll over testing - Crash testing (if needed) - ROPS Testing Various Gradients Various braking surfaces Vehicle dynamics 41#42ALTERNATE ENERGY ALTERNATE ENERGY SOURCE DEVELOPMENT & TRACTOR DEVELOPMENT ARE INTERDEPENDENT • More Focus on agriculture based energy policy in near future • Production of fuel oil & biomass power • Lucrative alternate markets for farm produce • Reduces the country's dependence on imported fuels Alternate energy development - most important agenda for Power train research & development 42 42#43APPLICATION OF ELECTRONICS The recent developments in application of Electronics in Agricultural Tractors like GPS and Auto Cruise systems, etc have helped farmers in great way 43 45#44EXPORT POTENTIAL MULTIPLE GROWTH IS ACHIEVED IN THE TRACTOR EXPORT TO VARIOUS COUNTRIES Testing as per various climatic conditions - one of the challenge for export of tractors - would be addressed by NATRIP Centers Testing and Certification as per OECD • NATRIP would represent INDIA in the technical committees world wide Expert team to coordinate with standardization Cooperation with other test agencies world wide Advanced homologation labs to test as per regulations up 2015 44#4545#46The Indian Tractor Industry is the largest in the world. CAGR of 10% in the last 4 decades. Expected to grow at a CAGR of 5-7% to reach a level of 410000 tractors per year by 2010. Main drivers of growth of tractor industry are Agricultural growth, increase in allied uses of tractors, primarily haulage and Credit and Money availability. • Excellent Tractor testing facility is already available in India at CFMT & TI, Budni. 46#47A project named NATRIP is underway which is country's first comprehensive initiative to equip it with state-of-the-art automotive testing, homologation and pre- competitive/generic R&D Infrastructure to meet national and international requirements. ⚫ NATRIP is also planning to work with UNAPCAEM in close association in future. 47