TRACTOR LTD

Marketing Plan for Tractor

12/6/2012

Presented by Group 2

Ankush Rawat – A 06

Arpit Khurana – A 07

Asish Senapati – A 08

Divyansh Bakshi– A 09

Bala Madanu – A 10

Table of Contents

1. Executive Summary ...................................................................................................................... 4

2. Situational Analysis ...................................................................................................................... 4

Customers ................................................................................................................................................. 4

Competitors .............................................................................................................................................. 5

Company ................................................................................................................................................... 5

Context ...................................................................................................................................................... 6

3. Market Opportunity and Issues .................................................................................................... 6

Indian agricultural sector .......................................................................................................................... 6

Indian Tractor Industry - Key Highlights .................................................................................................... 6

Tractor Market .......................................................................................................................................... 7

Indian tractor market: Segment-wise sales .............................................................................................. 7

Utilization of Tractors in Indian Farming .................................................................................................. 7

Division of Farming land in India ............................................................................................................... 8

4. Company Objectives ..................................................................................................................... 8

Sales Objective .......................................................................................................................................... 8

Dealer Network Objective ......................................................................................................................... 9

Demand Forecast .................................................................................................................................... 10

Outlook for the year FY12-14 .................................................................................................................. 10

Tractor Sales in various segments ........................................................................................................... 11

Industry Sales forecast ............................................................................................................................ 11

Break even Analysis ................................................................................................................................ 12

5. Marketing Strategy ..................................................................................................................... 12

6. Target Markets ........................................................................................................................... 13

7. Positioning ................................................................................................................................. 13

8. Marketing Mix – 4 P Analysis ...................................................................................................... 13

Product .................................................................................................................................................... 13

Price ........................................................................................................................................................ 14

Place: ....................................................................................................................................................... 14

Promotion ............................................................................................................................................... 15

EXHIBITS ............................................................................................................................................ 16

Exhibit 1: Interaction with Dealer ........................................................................................................... 16

Exhibit 2: Interaction with Dealer ........................................................................................................... 17

Exhibit 3: Interaction with Dealer ........................................................................................................... 18

Exhibit 4: Interaction with Dealer ........................................................................................................... 19

Exhibit 5: Interaction with Dealer ........................................................................................................... 20

Exhibit 6: Product and Price analysis of competition ............................................................................. 21

Exhibit 7: Estimation of Investment in Manufacturing Plant .................................................................. 23

Exhibit 8: Prospective Locations to establish Dealer network in South Zone ......................................... 24

1. Executive Summary Tractors Ltd. aims to capture the Indian tractor market which has huge potential but very low penetration levels. The potential demand for tractors is, consequently, large, depending on growth in agriculture output and productivity. Tractor demand is likely to increase with increased government investment in irrigation, increased multiple cropping and the spread of scientific cultivation.

The availability of irrigation facilities determines the degree of farm mechanization and, consequently, affects the demand for tractors in any particular region. States with a higher irrigated area have a greater penetration level of tractors. The potential in southern and western States comes from an improvement in irrigation facilities and increasing mechanization of agriculture. The southern and western States of Gujarat, Maharashtra and Madhya Pradesh are likely to be the most attractive markets for tractors in the future.

Tractors Ltd. will initially establish itself in the Southern Region. This is due to the below factors

1. Low levels of penetration of Tractors in Farming 2. Healthy expected demand 3. Stable monsoon outlook 4. Increase in area under irrigation and Irrigation Facilities 5. Increasing availability of financing options

Tractors ltd. will tie with major dealers in Southern region. We plan to set up the Corporate office and manufacturing plant in Chennai’s SEZ. Our tractors will be marketed under the brand name “Dabaang”. Tractors Ltd. aims to become one of the leading tractor company in volumes in the >40 HP tractors and <20 HP segments in the next 10 years. We will be launching three different models in the >40 HP segment during the first year and then extend our product line in this segment in the 2nd and 3rd years. In our 4th year of operations, we will tap into the vast potential available in marginal farmers category by introducing <20 HP segment tractors.

2. Situational Analysis

Customers

We are planning to launch variants of >40 hp tractors and focus on the South Indian market. We would be targeting the farmers in the states of Tamil Nadu, AP and Maharashtra because these states are more or less untapped by our major competitors. We believe there is a huge scope for tractors as farm equipments as well as construction equipment in these states because of the following factors:

• More farmers are opting for multiple cropping over last decade. Country's net cropped area had remained virtually stagnant while gross cropped area increased by about 4.7%. This indicates the increased popularity of multiple cropping. Multiple cropping requires deeper tilling and that is where our higher hp tractors would be needed.

• 95% of tractor sales are on credit. Credit is extended by commercial banks, state land development banks, regional rural banks and micro-financing bodies.

• Irrigation facilities reduce reliance on the monsoon and allow for quick yielding varieties of food -grain .This reduces the cropping cycle to 3-4 months from the traditional 5-6 months.

• Cost of tractors in India is the cheapest in world .The cost of a finished tractor here is as much as the cost of gear box in developed countries. Hence there exists tremendous scope for exports.

• Lately it is visualized that higher hp segment has the maximum growth potential Higher horse powered tractors will be the future requirement with the government intention to encourage contract farming through the leasing in and leasing out of farm lands

Competitors Mahindra holds the largest share in the tractor market. Other major competitors are FORCE, TAFE, John Deere, HMT and Eicher in 40 to 50 HP segment. After a detailed analysis we have found that our major competitive advantage lies in the features which we provide in our product which is in three models with different HP, higher capacity to lift from lower hitch point, higher fuel tank capacity and oil immersed disk brakes. Our Unique selling proposition for the >40 HP segment will be improved performance with reduced cost.

With some established players already in the market and brand loyalty in the rural segment we will face some tough challenges in the initial years to get the market share and efforts are to be made to market the product properly in the rural segment.

Company We are planning to set up a plant in the outskirts of Chennai with a total investment of 20-25 crores. The total capacity which the plant can produce is 12000 units. The location of Chennai was selected keeping in mind two factors.

• The Tamil Nadu govt. is keen on making the state the automobile hub and has agreed to allocate land at a low cost. It has also agreed to give us an initial tax exemption for the first 5 years.

• The close vicinity to the port will give us a strategic advantage in the long run when we start to export since there is huge scope for export of tractors.

The capacity of 12000 units is decided keeping the long run in mind. We intend to produce around 4000 units in the first year at 44.4% capacity and 7000 units in the second year at 77.78% capacity. We intend to improve on our operation and expand our production to 10000 units in the third year at 83.33% capacity. We intend to tap 3 to 4% of market share by the end of the first year and extend it to 6-7% by the end of second year and subsequently 9-10% by the end of the third year. The tractor market is highly fragmented expect for M & M which has around 45% Market share and Tafe which has 25% market share. The rest 30% market share is divided among various players. Hence, a market share of 10% by the end of 3rd year will make us one of the leading player in tractors market. We have also identified the distributor network and will be dealing with 350 dealers during the first year. These dealers will be

dealing with the dealer network which will be distributed evenly across the states we plan to operate. We plan to bolster our distributor network to 550 by the second year and 700 by the third year.

Context

India's gross cropped area is next only to United States of America and Russia and along with fragmented land holdings has helped India to become the largest tractor market in the world. But it drops to eight position in terms of total tractor in use in the country when compared to international figures, only 3% of total tractors used all over the world . It is to be noted that while the overall automobile industry is facing recession the tractor industry is growing at 11%.About 20% of world tractor production is carried out in our country only.

In terms of volume, India is one of the largest tractor markets in the world, besides China and the USA. The prospects of the domestic industry are highly linked to monsoon rains, which remain a key factor in determining agricultural production. Better irrigated States like Punjab and Haryana have a high tractor density (over 100 per 1,000 hectares), while States like Rajasthan, Gujarat, Himachal, Tamil Nadu, Maharashtra, AndhraPradesh, MP and West Bengal have low levels of tractor penetration—a pointer to the substantial growth potential that the latter set offers.

3. Market Opportunity and Issues

Indian agricultural sector Agriculture’s contributes to India’s total GDP is declining in recent years and is currently at ~18%. Agriculture in India is currently growing at an average rate of 2.8%. But, Agriculture has always the key sector of India’s economy, and will continue to be the critical sector for the growth of Indian Economy. 68% Indian live in villages & are highly dependent on agriculture & allied activities. Agriculture accounts for ~10% of India’s exports.

Indian Tractor Industry - Key Highlights

• The Indian Tractor Industry has developed over the years to become the largest in the world. • Starting in 1960′s it had reached just about 50,000 units in the early 1980′s, but today the size

Indian Tractor market has grown to over 600,000 units. • Increasing Tractors are being used for haulage and non-agricultural applications as well. • The opportunities are still huge considering the low farm mechanization levels in the country,

when compared to other developed economies across the world. • After a splendid performance during the last two to three years, the Indian tractor industry is

believed to head for a slowdown, which we believe is a myth. • Increasing focus on Farm mechanization

Tractor Market

• Tractor market has grown at a CAGR of 12.8%, in the last five years • Sales, steady since FY07, should increase even more (as witnessed in FY12) due to rising farm

income and rural growth. • Demand outlook for FY12-14 remains positive. We expect the industry to grow ~11-12% YoY • Tractor financing continues to enjoy priority lending status, thus attracting lower interest rates

and higher participation by banks. • The greater participation by NBFCs and private banks will further boost sales

Indian tractor market: Segment-wise sales

• India has been predominantly a 31-40 HP market, ~42% of the industry. • However, during the last 5 years, there has been a shift to higher hp tractors. The share of 40+ HP

tractors has gone up from 29% in FY05 to 44% in FY11, clearly indicating the multi-use of tractors.

• Combined share of tractors above 40 hp has more than doubled over the last ten years

Utilization of Tractors in Indian Farming Agricultural use of tractors has been steadily increasing over the past few decades owing to green revolution and its focus in Five Year Plans by Govt. of India.

Percentage share of Tractors use in Indian Agriculture

Year Tractors 1971-72 8.45% 1981-82 18.46% 1991-92 26.14% 2001-02 36.77% 2005-06 38.45% 2009-10 41.67%

With modernization of agricultural equipment, better irrigation facitlities, reduced agricultural labour and due to urbanization, there will be an increased utilization of agricultural equipment, especially tractors.

Division of Farming land in India

As we can clearly see, the marginal and small farmers undertake more than 80% of the agricultural activity in India.

Figure: Classification of farmers based on the agricultural land they hold

The penetration levels are as follows:

1. Large Farmers – 46.2 % 2. Medium Farmers – 21.9% 3. Small & Marginal Farmers – 1.2%

This shows that a lot of market is still untapped and this provides a huge potential for the tractor industry.

4. Company Objectives

The company’s objectives are outlined below based on the demand and sales forecast.

Sales Objective

FY 13 FY 14 FY 15

Total Units (>40 HP) 4000 7000 10000

Note: The sales objective has been arrived on based on the industry growth rate (sales volume), tractors ltd. targeted market share and the plant capacity.

During the fourth year of operations, we plan to enter the <20 HP market segment as it offers huge untapped potential. The majority of Indian farmers i.e. 63% are marginal farmers (own <2.5 acres of land). These tractors will be primarily be targeted at providing value for money. The delay in entering this segment during our first three years of operations is because of the below reasons:

• Intense competition and Tractors Ltd being a new entrant in tractors market

Large Farmers

> 20 acres1%

Medium Farmers5 - 20 acres

17%Small Farmers2.5 - 5 acres

19%Marginal Farmers

< 2.5 acres63%

• Although <20 HP segment offers high potential, it is a segment where most of the top brands have been very keen to enter

• Major contributing factor to purchasing tractors (based on our survey, Exhibits 1-5) is the word of mouth and dealers preference of brand. We plan to build a brand for ourselves in the initial 3 years and then this will provide a platform for Tractors Ltd to enter this niche market segment.

Dealer Network Objective FY 13 FY 14 FY 15 Dealer (No of dealers) 350 550 700

Note: The above dealer networks objective have been set based on the below data:

• No of dealers(tractors) of M & M in India – 1800 + • No of dealers(tractors) of Tafe in India – 1200 +

The below map indicates the tentative location identified to achieve the dealer network objectives. The detailed list of prospective locations identified in mentioned in Exhibit 8.

Demand Forecast The demand-side economics in the tractor industry however continue to find favor from structural and long-term drivers such as –

• Support from the Government of India (GOI) towards rural development and agri-mechanisation, Scarcity of farm labor especially during the sowing season

• Increase in credit flow to agriculture • Growth in high and low power segments, low to moderate penetration, shortening replacement

cycle; besides healthy exports. • Improvement in Tractor Financing due to higher farm incomes, govt. schemes like NAREGA

Note: The above graphs show the spending pattern and increasing credits flows to agriculture sector.

Outlook for the year FY12-14

• Demand outlook for FY12-14 remains positive. We expect the industry to grow at atleast CAGR of 9% to 10%

• Farm income growth continues to be strong and acts as a strong catalyst for demand • Tractor financing continues to enjoy priority lending status, thus attracting lower interest rates

and higher participation by banks • The greater participation by NBFCs and private banks will further boost sales • The meteorological department has predicted a regular monsoon for this year. Although rainfall

does not directly affect tractor sales, availability of water will definitely lead to higher productivity, which will boost tractor sales

• Successful implementation of government schemes (NREGA) and higher minimum support prices will put more money directly in the farmers’ hands, driving tractor demand

Tractor Sales in various segments

* Projected Sales Figures in various segments based on trend analysis and other parameters.

Industry Sales forecast

Tractor Sales Data over the past few years

FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 CAGR (7 yrs)

CAGR ( 4 yrs) FY 13 FY 14 FY 15

North 113062 137250 115423 123372 167878 168800 193816 8.00% 11.95% 209328 226082 244177 South 73813 90324 78464 66712 74881 94046 100398 4.49% 10.76% 104908 109621 114545 East 26655 31754 27568 33813 55557 61733 62816 13.03% 16.75% 70999 80249 90703 West 76449 92088 79978 78288 101854 155778 177709 12.81% 22.75% 200468 226140 255101 Total 292908 352827 302948 304622 402586 482286 536886 9.04% 15.22% 585430 638363 696083

1%26%

55%

19%

Sales in Yr 2000

HP < 20

HP 21 - 30

HP 31 - 40

HP > 40

1%20%

51%

29%

Sales in Yr 2005

HP < 20

HP 21 - 30

HP 31 - 40

HP > 40

1%13%

42%

44%

Sales in Yr 2010

HP < 20

HP 21 - 30

HP 31 - 40

HP > 40

2%8%

35%55%

*Sales in Yr 2015

HP < 20

HP 21 - 30

HP 31 - 40

HP > 40

Break even Analysis

December 6, 2012 Fixed Costs Variable Costs

Manufacturing Plant Set Up 200000000 Production costs: Direct materials 200000.00 Direct labor 1000000.00 Indirect production costs 150000.00 50000.00 Selling expenses: Sales salaries & commissions 20000000.00 5000000.00 Advertising 40000000.00 Miscellaneous selling expense 2500000.00 General expenses: Office salaries 5000000.00 Supplies 1000000.00 50.00 Miscellaneous general expense 150000.00 Totals 268800000.00 6250050.00 Sales and Income data: Avg Selling price per unit 506670.00 Target operating income for the period 10000000 Results Contribution margin per unit 56670.00 Unit sales at break-even point 4566

Based on the above analysis, we expect to break even during our 2nd year of operations.

Note:

5. Marketing Strategy

The above data is taken from analyzing various investments of companies in setting up tractor manufacturing factories (Exhibit 7) and also from analysis the Balance Sheet of M & M.

Maintaining Customer focus while providing value for money

Increasing operational efficiency by reducing costs and increasing distribution network

6. Target Markets

The target segment chosen by Tractors Ltd, is > 40 HP segment due increasing trend in sales in tractors >40 HP segment. The following factors have been considered while selecting the target market.

Historical growth and future potential Geographical factors like irrigation facilities, nature of soil etc. Supply and demand forecasts Economical factors like availability of skilled labour, urbanization, farm incomes etc.

During the fourth year of operations, we plan to enter the < 20 HP market segment as it offers huge untapped potential. The majority of Indian farmers i.e. 63% are marginal farmers (own <2.5 acres of land). These tractors will be primarily be targeted at providing value for money.

7. Positioning

Tractors Ltd. will position itself as a brand which stands for strength and pride of rural India.

8. Marketing Mix – 4 P Analysis Product A tractor is a simple open vehicle with two very large driving wheels on an axle below and the engine in front of the driver with two steerable wheels below the engine compartment. It is used for pulling or pushing agricultural machinery or trailers for plowing, tilling, disking, harrowing, planting and similar tasks. We are offering three models of tractors in 42, 45 and 50 HP segment. After analyzing the features offered in these segments we are offering better features in all the three segments which are as shown below :-

Model name

HP Engine Type Gears Capacity to lift from lower hitch

point

Brakes Fuel tank capacity

1 42 4- stroke, 3 cylinder direct

injection

8 forward 2 reverse

1400 Oil immersed disk brakes

60

2 45 4- stroke, 3 cylinder direct

injection

8 forward 2 reverse

1500 Oil immersed disk brakes

60

3 50 4- stroke, 3 cylinder direct

injection

8 forward 4 reverse

1700 Oil immersed disk brakes

60

Our larger fuel tank capacity will enable the users to use the tractor for a longer duration without the problem of refueling it at shorter spans. We understand that some villages are very remote and the nearest

fuel station is miles away. A higher fuel tank will help these customers of ours. The effective design of our tractors will make sure that the fuel consumption is relatively low and maintenance cost is also low adding to the cost savings over and above the savings that we offer through the lower price. We are offering higher capacity to lift from the lower hitch point which is a very important attribute of a tractor. The above features along with higher HP this capacity makes our tractor a very efficient and powerful vehicle.

Price The detailed price analysis of competition is mentioned in the Exhibit – 6. The summary is as below:

Model name HP Engine Type

Price for Tafe

Price for Mahindra Swaraj

Price for Eicher

Price for Sonalika

Our Price Range

1 42 4- stroke, 3

cylinder direct injection

` 475000 ` 400000 ` 415000 ` 410000 ` 415000

2 45 4- stroke, 3

cylinder direct injection

` 500000 ` 425000 ` 500000 ` 450000 ` 490000

3 50 4- stroke, 3

cylinder direct injection

` 590000 ` 600000 ` 630000 ` 625000 ` 610000

Place:

The company will follow a distributor/dealer centered model to reach its customers but will also maintain a constructive relationship with the end customers to ensure that the sales are driven more efficiently during the initial few years to counter competition. This is because most of the competitors strictly a distributor centered model with a push strategy. This will help the company to understand the customer requirements in larger detail and help in “word of mouth” marketing of the tractors.

The dealers’ locations identified in Exhibit 8 are chosen based on the below

1. Proximity to farming communities 2. Existing dealers 3. Well connected distribution networks and 4. Urbanization levels

Company

CustomersDistributors

Promotion Tractor sales in India is hugely influenced and promoted by word of mouth publicity. Due to less penetration of internet and lower literacy levels among the target market, promotion of tractor as a product can be tricky. As a new player entering the market, a major tool in promoting the product can be to incentivize the dealers. Most of consumers, buy the product after the recommendation of the distributor. Based on our interaction with various dealers (Exhibits 1-5) we propose the below activities

• Incentivizing the distributor can hence help the company in creating a dent in the market and forming a customer base

• Television and Radio, where local celebrities can endorse the product and help in connecting with the local customer

• Advertisements in the regional newspaper and magazines can also help in the promotion of the product in a substantial way

• Besides this, a major technique used in the promotion can be the stalls presented in Local Village fairs (mela) where the potential customer can get a first-hand experience of the product. Setting up stalls in these fairs will also expose the entire product range to all type of customers

• A tug of war of tractors can be used to display the strength and robustness of the tractor • Promotion can also be done by providing seasonal schemes to get the focus of the customer in

every season

EXHIBITS

Exhibit 1: Interaction with Dealer

Questionnaire for Data Collection Name Mr. Parameshvaram

Company SRI PADMAVATHI AUTOMOTIVE

Contact No 0863-2239247

Email id padmavathiautomotives_guntur@yahoo.com Person Interacted Bala Madanu

Sno Questions Response

1 Which all tractor brands you deal with Tafe, Eicher, MASSEY FERGUSON [MF]

2 How are the sales prospects Medium

3 What parameters you look into when partnering with a company

Brand, Margin, Payment terms, sales & promotional activities

4 No of units sold in a quarter(Approx) 10 - 15

5 What margins do you get on each sale 2 - 3 % Net profit

6 Any incentive schemes by current OEMs No

7 Which parameter drives your decision while partnering

Profit Margin, Payment terms, stocking schemes

8 Demography of customer Mid size farmers

9 Product knowledge of customer very basic knowledge. Usually from kin reference & my suggestions

10 Parameters evaluated by customer while buying

quality, life of the vehicle, HP,price, capacity, fuel efficiency,warranty & service suport, brand, discount schemes

11 Major decision making parameter quality, life of the vehicle,warranty & service suport, dealer's choice

12 Promotional activities village fairs,word of mouth

13 Other aspects which were discussed NIL

Exhibit 2: Interaction with Dealer

Questionnaire for Data Collection

Name Mr. Ram Kishore

Company Damyanthi AUTOMOTIVE

Contact No 9716147923

Email id ramkishore@yahoo.com Person Interacted Ankush Rawat

Sno Questions Answer / Response

1 Which all tractor brands you deal with Swaraj, Eicher, MASSEY FERGUSON [MF]

2 How are the sales prospects Low

3 What parameters you look into when partnering with a company Margin, sales & promotional activities

4 No of units sold in a quarter(Approx) 08-10

5 What margins do you get on each sale 3 % Net profit

6 Any incentive schemes by current OEMs No

7 Which parameter drives your decision while partnering Profit Margin, Payment terms,

8 Demography of customer large Scale

9 Product knowledge of customer Extensive Knowledge. kin reference & my suggestions

10 Parameters evaluated by customer while buying

quality, life of the vehicle, HP, ,warranty & service suport, brand

11 Major decision making parameter quality, life of the vehicle,warranty & service support, dealer's choice

12 Promotional activities TV,word of mouth

13 Other aspects which were discussed

Exhibit 3: Interaction with Dealer

Questionnaire for Data Collection Name Mr. Rangarajan Company Ananya AUTOMOTIVE Contact No 080-2258164 Email id ananyaautomotives@gmail.com Person Interacted Ankush Rawat

Sno Questions Answer / Response

1 Which all tractor brands you deal with Tafe, Eicher, Swaraj

2 How are the sales prospects Medium

3 What parameters you look into when partnering with a company

Brand, Margin, Support, sales & promotional activities, Spare services

4 No of units sold in a quarter(Approx) 12 - 15

5 What margins do you get on each sale 2 - 3 % Net profit

6 Any incentive schemes by current OEMs No

7 Which parameter drives your decision while partnering Profit Margin, Payment terms, brand

8 Demography of customer Mid size-high farmers

9 Product knowledge of customer basic-medium knowledge. Dealers suggestion matters

10 Parameters evaluated by customer while buying

quality, HP,price, capacity, fuel efficiency,warranty & service suport, brand

11 Major decision making parameter quality, life of the vehicle,warranty & service suport

12 Promotional activities word of mouth, news papers,Tv

13 Other aspects which were discussed

Exhibit 4: Interaction with Dealer

Questionnaire for Data Collection

Name Mr. Jayashankaran

Company Jayalakshmi Tractors

Contact No 080-2119547

Email id jayalakshmitractors@yahoo.com Person Interacted Ankush Rawat

Sno Questions Answer / Response

1 Which all tractor brands you deal with Tafe, Eicher

2 How are the sales prospects Medium-Low

3 What parameters you look into when partnering with a company

Brand, Margin, Payment terms, sales & promotional activities,After sales

4 No of units sold in a quarter(Approx) 9-11

5 What margins do you get on each sale 2 % Net profit

6 Any incentive schemes by current OEMs No

7 Which parameter drives your decision while partnering

Profit Margin, Payment terms, stocking schemes

8 Demography of customer Small-Mid size farmers

9 Product knowledge of customer Good knowledge.

10 Parameters evaluated by customer while buying

Quality, HP,price, fuel efficiency,warranty & service suport, discount schemes

11 Major decision making parameter quality, life of the vehicle,warranty & service suport, dealer's choice

12 Promotional activities word of mouth,Brochures

13 Other aspects which were discussed They do not provide services to feeder towns

Exhibit 5: Interaction with Dealer

Questionnaire for Data Collection Name Mr. SHYAM

Company M/S SHYAMBABA MOTORS AND TRACTORS

Contact No 07109-278389

Email id shyambabamotorsandtractors@gmail.com Person Interacted Bala Madanu

Sno Questions Answer / Response

1 Which all tractor brands you deal with Tafe, M & M

2 How are the sales prospects Good. Both Agricultural and Industrial Customers

3 What parameters you look into when partnering with a company Margin, Payment terms

4 No of units sold in a quarter(Approx) 20-25

5 What margins do you get on each sale 3% Net

6 Any incentive schemes by current OEMs Yes. Better margins if target exceed 150%

7 Which parameter drives your decision while partnering

Profit Margin, Payment terms, stocking schemes

8 Demography of customer Mid size farmers, Infrastructure companies

9 Product knowledge of customer

Farmers have very basic knowledge while company personnel usually negotiate to a larger extent

10 Parameters evaluated by customer while buying

quality, life of the vehicle, HP,price, capacity, fuel efficiency,warranty & service suport, brand, discount schemes

11 Major decision making parameter quality, life of the vehicle,warranty & service suport, dealer's choice

12 Promotional activities village fairs,relationship selling, word of mouth, seasonal discounts

13 Other aspects which were discussed NIL

Exhibit 6: Product and Price analysis of competition

S.no.

Company/

Brand

Tractor Model

Horse Power (HP)

Other Imp features Tractor Price Range/ MRP

1 Tafe MF 7250 DI (Power Drive)

47 HP EngineSimpson S 325 Engine TIII A Cylinders3 Cubic Capacity2500 cc Fuel Injection PumpRotary

RS 535000

MF 245 DI Mahashakti

49HP EngineSimpson S325 Engine TIII A Cylinders3 Cubic Capacity2500 cc Fuel Injection PumpRotary

RS 565000

F 241 DI Mahashakti

42HP EngineS 325.1 Simpson engine TIII A Cylinders3 Cubic Capacity2500 cc Fuel Injection PumpInline

Rs475000

MF 5245 DI Planetary Drive

47HP EngineSimpson S325 Engine TIII A Cylinders3 Cubic Capacity2500 cc Fuel Injection PumpRotary

Rs 525000

MF 5245 DI Maha Mahaa

50HP EngineSimpson SJ327 Engine TIII A Cylinders3 Cubic Capacity2700 cc Fuel Injection PumpInline

Rs 590000

2 Mahindra swaraj

Arjun 445 DI 40HP Cylinders 4 Cubic capacity 2500 cc radial tires and Side shift gears

Rs 400000

Bhoomiputra 475DI

45HP Cylinders 4 forward speed of up to 30 kmph unique surge tank fuel efficient

Rs 425000

Sarpanch 575 50HP Tubo charged Cylinder 3 mesh transmission multi-disc brakes

Rs 600000

3 Eicher Eicher 380 Super DI

40HP Four stroke, water cooled, direct injection diesel engine Cylinder 3 Cubic capacity 2500

RS 415000

Eicher 480 Super DI

45HP Four stroke, water cooled, direct injection diesel engine Cylinder 3 Cubic capacity 2500

Rs 500000

Eicher 485 Super DI

45HP Four stroke, air cooled, direct injection diesel engine Cylinder 3 Cubic capacity 2945

Rs 587000

Eicher 5150 Super Di

50HP Four stroke, water cooled, direct injection diesel engine Cylinder 3 Cubic capacity 2500

Rs 630000

Exhibit 7: Estimation of Investment in Manufacturing Plant

Exhibit 8: Prospective Locations to establish Dealer network in South Zone

Sno Location State Sno Location State 1 Viluppuram

Tamil Nadu

76 Rayagada

Orissa

2 Vadalur, Cuddalore 77 Nuapada 3 Theni 78 Nayagarh 4 Tiruchirappalli 79 Jeypore 5 Thanjavur 80 Khordha 6 Pudukkottai 81 Bilaspur ‎ 7 Pollachi, Coimbatore 82 Ganjam 8 Karaikkudi, Sivaganga 83 Bhubaneshwar 9 Mayiladuthurai 84 Bhadrak

10 Kumbakonam, Thanjavur 85 Baripada, Mayurbhanj 11 Madurai 86 Balangir 12 Vellore 87 Bargarh 13 Kanchipuram 88 Balasore, Baleswar 13 Erode 89 Angul 15 Harur, Dharmapuri 90 Vizianagaram

AP

16 Dindigul 91 Bobbili, Vizianagaram 17 Cuddalore 92 Bhadrachalam 18 Coimbatore‎ 93 Srisailam 19 Chennai 94 Doranala 20 Ariyalur, Perambalur 95 Macherla 21 Hosur, Krisnagiri ‎ 96 Suryapet, Nalgonda 22 Shikrapur, Pune

Maharastra

97 Jangaon, Warangal 23 Satara 98 Sircilla, Karimnagar 24 Sangli 99 Bhongir, Nalgonda 25 Washim‎ 100 Mancherial, Adilabad 26 Wani, Yavatmal 101 Kaghaznagar, Adilabad 27 Palus, Sangli 102 Adoni 28 Pahur, Jalgaon 103 Rayadurg, Anantapur 29 Kolhapur, ‎ 104 Kavali 30 Ombare, Solapur 105 Nellore 31 Osmanabad 106 Gudur 32 Solapur 107 Chittoor 33 Baramati 108 Tirupati 34 Koregaon 109 Proddutur, Kadapa 35 Karmala 110 Narasaraopet 36 Beed 111 Chirala, Prakasam 37 Shrirampur, Ahmednagar 112 Tenali, Guntur

38 Manmad, Nashik 113 Eluru, West Godavari 39 Shevgaon 114 Nuzividu, Krishna 40 Kalwan, Nashik ‎ 115 Tuni, East Godavari 41 Sakri, Dhule 116 Nagpur, Maharashtra 42 Dhule 117 Adilabad, AP 43 Malegaon 118 Nirmal, Adilabad, AP 44 Nanded 119 Kamareddy, Nizamabad, AP 45 Jalgaon 120 Sangareddy, Medak, AP 46 Thane 121 Miryalaguda, Nalgonda, AP 47 Wardha 122 Nandyal 48 Akola 123 Kadapa 49 Amravati 124 Kurnool 50 Nashik 125 Guntakal, Anantapur 51 Aurangabad 126 Mahbubnaga 52 Ahmednagar 127 Mumbai, Maharashtra 53 Tumkur

Karnataka

128 Pune, Maharashtra 54 Tiptur 129 Anantapur 55 Shimoga 130 Ongole, Prakasam 56 Kolar 131 Rajahmundry AP 57 Kadur 132 Kakinada, AP 58 Raichur 133 Khammam 59 Mysore 134 Nalgonda 60 Manvi 135 Siddipet 61 Hubli 136 Nizamabad, ‎ 62 Hospet 137 Hyderabad 63 Haveri‎ 138 Warangal 64 Hassan 139 Karimnagar 65 Gokak 140 Vijayawada‎ 66 Gulbarga 141 Guntur 67 Gangawati 142 Srikakulam 68 Davanagere 143 Vishakhapatnam 69 Chitradurga 144 Ranga Reddy 70 Chikballapu 145 Anakapalle 71 Chikmagalur 146 Vizianagaram 72 Bijapur

73 Bidar, ‎ 74 Bellary 75 Belgaum