India’s need for food security and to change agricultural practices, pushed Mahindra to foray into manufacturing tractors 58 years ago. Today, the company is the world’s largest farm tractor producer by volume.
In 1963, Mahindra formed a joint venture with International Harvester of the United States to introduce Mahindra branded tractors in India. Mahindra’s idea of a tractor for India, was one that could perform well in the hands of the farmer, was rugged in negotiating India’s unforgiving terrain, and yet fuel efficient.
With a vision of driving prosperity for the farmer, Mahindra’s journey began with pioneering accessible and revolutionary farming technologies. Having worked closely with generations of farmers, Mahindra has been India’s No.1 tractor brand for over three decades and continues to be one of the most popular tractors on Indian farms.
Mahindra’s first tractor, the B-275, which was based on International Harvester’s incredibly popular IH B-414 design, still resonates well with the Indian farmer and continues to be the basis of several of Mahindra’s current tractor models.
Popularly known as ‘Desh Ka Laal’, its distinct red colour adds to the admiration a farmer has for a Mahindra; a clever twist of the language, with ‘Laal’ standing for both ‘red’ and ‘son’ in Hindi. A testament to Mahindra’s success is the roll-out of Mahindra’s 3-millionth tractor in March 2019. Red travelled the world to become No.1.
‘Desh Ka Laal’ went on to become the core idea behind the first advertisement created in 2011.The advertisement was recently reintroduced in 2020. Click here to watch the advertisement.
Mahindra’s big global move
A global milestone was reached by the company in 2010, when Mahindra attained the feat of becoming the world’s largest farm tractor manufacturer by volume. But it wasn’t just India that fell in love with the striking red Mahindra tractor… Mahindra found its second home in the US, among the largest tractor markets in the world.
Mahindra had entered the American market, the biggest and the most demanding tractor and automotive market in 1994. The market was dominated by players like John Deere and New Holland, both with a history of more than 100 years. As the 3rd largest tractor company in the US market today in its segment, the brand’s success was a result of offering a value proposition that included reliability, quality and innovation.
As the only tractor company in the world to win both the Deming Award and the Japanese Quality Medal, Mahindra leveraged these advancements in quality manufacturing. Today, Mahindra tractors sell in over 40 countries and have an on-ground presence in North America, Brazil, Mexico, Finland, Turkey and Japan through subsidiaries.
“It all started in 1995-96 when the then President of Farm and Equipment Sector, K G Devasia was working on creating a vision for Mahindra’s farm business. We began to think about potential growth opportunities for our business and how we could grow it multifold. It boiled down to the fact that the tractor business had global potential compared to other Mahindra businesses. We then started analysing global players, market sizes, customer preferences, etc. Our confidence in taking the tractor business global also came from our early experience in the US market through Mahindra USA (MUSA)”, explains Harish Chavan, a veteran at Mahindra Group and the current CEO of the Swaraj Division.
Another feather in Mahindra’s cap
Harish goes on to talk about Mahindra FES’s audacious goal of becoming the world’s No.1 tractor brand and the very thought behind the acquisition of Punjab Tractors. “India was a key market which had the potential for growth. And if we truly wanted to be the global number one, we couldn’t have ignored the domestic market and the opportunities it presented.”
Founded in 1972, Punjab Tractors was the first Indian company to indigenously design and manufacture agricultural tractors in India, called ‘Swaraj’ inspired by India’s Green Revolution. Swaraj Tractors were built entirely in India. They were rugged, powerful and known for their durability. And as competitors, Mahindra always benchmarked itself against Swaraj in terms of frugal engineering.
Mahindra took over Punjab Tractors in 2007. Today the combined market share of Mahindra and Swaraj is a formidable 40% in India, with Swaraj Tractors firmly placed as the second largest tractor brand in the country. The Swaraj brand has a high emotional connect with customers, captured by the brands slogan ‘Mera Swaraj’.
Beyond tractors to truly compete with larger global brands
Mahindra FES is a global leader in tractors with two primary brands present in over 40 countries and contributes to over 22% of the Mahindra Group’s overall revenues.
Looking at farm mechanisation in India from a global perspective the figures tell a story. The farm equipment industry globally which includes tractors and specialised farm machinery is valued at over USD 160 billion of which tractors make up only about USD 60 billion. In contrast, the Indian tractor industry is at around USD 6 billion, while the farm machinery industry is at just USD 1 billion. This showcases that Indian agriculture is tractorised but not mechanised. This was also reflective of how Mahindra needed to approach its own farm equipment business.
Hemant Sikka, President - Farm Equipment Sector, M&M Ltd., says, “While farm mechanisation in India has made strong strides in recent years, there is still a long way to go. Countries like the United States and European nations are completely mechanised, while China and Japan have also seen higher penetration of farm machinery. In comparison, the Indian agricultural sector still lags and requires more farm equipment, which currently is accessible to only a few large farmers. Also, while there is some level of mechanisation, it is largely skewed towards land preparation. For many other operations, simple implements are used.”
Seeing this potential in the farm machinery space, it gave Mahindra a clear indication of the possibilities beyond the core tractor business and the company has started its journey on it. Rajesh Jejurikar, former President FES and currently Executive Director, Mahindra Auto & Farm Sector explains, “With agriculture increasingly becoming technology intensive, and with the Indian consumer evolving, there is a greater need for specialised implements and differentiated farm machinery. A step in this direction we took was through alliances and acquisitions in global Agri Machinery companies and agricultural start-ups in the last few years.”
In 2015, Mahindra made its first acquisition in Mitsubishi Agricultural Machinery of Japan by picking up a 33% stake in the company. Mitsubishi provided Mahindra with expertise related specifically to the Rice Machinery Value Chain, while also providing Mahindra with competencies to develop light weight tractors for India and some global markets.
“So, when you think about wanting to move beyond tractors, in a way you are transforming yourself across the spectrum saying I am a specialised tractor player and want to move from here to being a more holistic mechanisation solution player ”, says Jejurikar.
Till date, Mahindra has made over eight acquisitions, signing with global names in the agri-technology space, including start-ups and partnerships to introduce a range of farm machinery. Basis these acquisitions, Mahindra established three global technology Centres of Excellence (CoE) to develop new agri technologies. These centres would allow Mahindra to bring back and adapt technologies relevant for the Indian market.
Mahindra has established three global technology CoE, with each centre aimed at delivering competencies related to specific mechanisation products and solutions. Going forward, these centres will play a key role in allowing Mahindra to strengthen its presence in Farm Machinery:
Japan — For light weight tractors & Rice Agri-Machinery value chain
Finland — Harvesters and Forest Machinery
Turkey — Farm Implements
In India, small and marginal farmers (with less than two hectares of land) account for about 86% of all farmers, but these farmers work on about just half the overall crop area. This means that majority of the farmers are unable to adopt modern technologies which need large crop area. Mahindra wants to make a difference here.
Speaking about Mahindra’s vision, Pawan Goenka, former MD & CEO, M&M Ltd. says, “Staying true to our vision, at Mahindra it was not about just selling hardware, it was about outcomes; outcomes that would make a difference to the lives of farmers. We believe that our obsession with data and analytics enables us to play a significant role in their lives, so as to achieve a desired outcome; an outcome based on agronomy advisory, access to advanced farm equipment rentals and new-age precision farming solutions, thereby enabling them to Rise! And to deliver this, we launched Krish-e.”
“Krish-e is Mahindra’s new ‘Farming as a Service’ business. Krish-e is revolutionary. It is all about being focused towards facilitating ease of operations, while bringing down the overall time and cost, improving output and subsequently income. As we continue to introduce Krish-e to the farmer, our idea is to work alongside them to bring in visible impact through a combination of agronomy inputs and advanced mechanisation solutions and digitally enable these farmers”, explains Goenka.
Mahindra FES rolled-out its first set of Krish-e centers in Maharashtra on 2nd October 2020 – Mahindra’s 75th Founders’ Day. With an omni-channel approach, farmers can avail of personalised services on their fields via the Krish-e suite of digital apps and through the call centres. Krish-e leverages the Internet of Things (IoT) and Artificial Intelligence (AI) to benefit the farming ecosystem and bring the power of precision farming to farmers, affordably and accessibly.
Through Krish-e, Mahindra has already impacted over 1 lakh farmers with solutions tailored to demonstrate impact on cultivation costs, crop health and productivity. Krish-e currently has approximately 1,900 demo plots and works alongside farmers to showcase visible impact. Such operations are already helping potato, grape and sugarcane farmers reduce their costs of cultivation and improve yields.
Through Krishi-e, Mahindra’s idea is to create a ‘Nation of Champion Farmers’ a vision that the company has remained true to right from its inception.
Did you like this story? Please share your views at [email protected] and do share these on your social networks.