Auto components maker Carraro India, the local arm of the Italian firm, is looking to make deeper inroads into the Indian market by offering new technologies such as a portal axle that helps boost the performance of a four-wheel drive tractor.
On Friday, the Pune-based company announced plans to invest Euro 20 million over the next four years to upgrade its operations, which accounts for 17 per cent of its global business. It exports a third of total production to Europe and South America. The move will help the company to tide over the slowdown, said Alberto Negri, chief executive, Carraro Group.
“The market is unlikely to pick up in the near future. There is a possibility for us to penetrate deeper into the market with newer technologies; that is why we are investing,” said Negri.
Tractor sales in India, one of the largest markets for such equipment globally, has been growing at a fast clip year-on-year. It witnessed double-digit growth for the third consecutive year in FY19. However, the pace was slowest in the past three years. In FY19, its sales advanced 10.24 per cent at 878,476 units as compared to 20.52 per cent and 15.74 per cent in FY18 and FY17, respectively. The moderation in growth was led by a weak sentiment in the last quarter of the financial year.
The new production area, with 5,000 square meters, is expected to start production in 2021. This will include a line of advanced conception for making portal axles for compact tractors with engines up to 75 hp. With plants in Italy, Argentina and China, Carraro counts Mahindra & Mahindra, TAFE, Escorts, Sonalika to New Holland and John Deere, in India as its customer.
“India is important for us, we have already reached a turnover of ^130 million and have a lot of expectations from this market,” said Negri.