M&M inks deal for Jiangling Tractor

Mahindra & Mahindra (M&M) today signed an agreement with Jiangling Motor Company group (JMCG) of China to acquire 80% stake in JMCG-owned Jiangling Tractor Company (JTC) with the transaction valued at $10 million.

The joint venture would acquire 100% assets of JTC. While M&M would chip in $8 million, JMCG would bring in $2 million, Anjanikumar Choudhari, who will take over as president of the farm equipment unit of the company in January 2005, said today.

"The joint venture will also acquire the Fengshou (good harvest) brand under which JTC tractors are sold. The Fengshou range of tractors is complementary to the M&M range, and will have a balanced product portfolio for China," he said.

Choudhari said the joint venture is planning to ramp up production capacity, and is aiming at manufacturing 2,500 tractors per year. JTC has a current capacity of 12,000 tractors, he said.

"Low-cost manufacturing base in China and M&M's design skills will give us excellent possibilities to develop overseas business in the US and other markets," he added.