Escorts In Southern Push, Eyes No.1 Slot

Escorts Ltd has chalked out a detailed strategy to beat the competition and emerge as the number one player in the tractor market by 2002-3.

The company would be launching three to four tractor models every year, beginning with the launch of Farmtrac 70 and Farmtrac, which are 80-65 horse power (HP) and 75 HP tractors fitted with Carraro transmission and axles. These models are particularly designed to cater to the needs of farmers in South India.

Besides the company also has major export plans.

Speaking to Business Standard, Rakesh Chopra, Escorts business head, said that "with our strategy in place, we should be able to increase our market share by 3 per cent within the next two to three years in order to get market leadership."

 

Chopra said Escorts' market share in tractors has improved from 17.7 per cent in 1998-99 to 20.2 per cent in 1999-2000. The market leader in the segment_M&M_posted a market share of 27.4 per cent in 1999-2000.

The company would be launch a new range of tractors in order to push up its sales in south India, where it only has a market share of around 5 to 6 per cent. Around 54 per cent of Escort's market for tractors comes from North India.

Escorts would soon announce an IT initiative for its tractor division. The company has already computerised 60 per cent of its dealerships and would announce setting up of a B2B portal shortly.

Chopra said last year's labour agreement has led to 100 per cent efficiency gains, and the company has hired Anderson Consultancy to look into cutting costs further.

The company is looking at bringing down the material costs on each tractor by Rs 10,000 within two years.

On the export front, Escorts has set a target of exporting 10 per cent of its total production_roughly 7,000 tractors_every year by 2003. The company exported around 1,200 tractors last fiscal, primarily to the USA, and hopes to export around 2,700 tractors in the current fiscal. The company plans to export 500 tractors to Poland in the current year.

Escorts has signed a joint venture with POL-MOT of Poland for assembly and marketing of tractors in Poland. The new venture_POL-MOT Escorts Spoika Zoo _ has an equity of US $ 1 million out of which Escorts holds 49 per cent.

Escorts Limited is also investing in research and development. In 1999-2000, the company invested Rs 21 crore in R&D. It would be investing Rs 28.8 crore this year, followed by Rs 13.5 crore in 2001-2.