Mahindra Group, the world’s largest tractor manufacturer by volume, is making inroads into Thailand on its mission to tap into the growing opportunity in the Southeast Asian tractor and other farm equipment markets, executives say.
Hemant Sikka, president of Mahindra’s farm equipment sector, said the Mumbai-based conglomerate is in the process of setting up a representative office in Thailand to support its launch of Mahindra tractors in the country early next year.
In doing so, Mahindra would challenge Japanese farm equipment maker Kubota, which has been in Thailand for decades and has captured about 70% of the country’s tractor market, along with Osaka-based Yanmar.
Mahindra, which operates in numerous industries including automotive, real estate, financial and technology services, as well as hospitality, has a dominant 41% share of the Indian tractor market with a presence in over 50 countries.
“We always look at Thailand as a very strong part of the global food chain but we feel that we should enter the market only when we have the right product for the customers,” Mr Sikka said on the sidelines of Mahindra’s global launch of Oja, the company’s lightweight tractor platform designed to serve diverse market needs including those of the US, Indian and Asean markets.
“The vision for our product-led business is to transform farming and enrich the life of farmers. We believe that with this product, we have an opportunity to transform farming in Thailand and that’s why we want to enter now,” he added.
Developed in collaboration with Mitsubishi Mahindra Agriculture Machinery with an investment of US$145 million, the new Oja range brings about a transformative shift in lightweight four-wheel-drive design and engineering with innovation in tractor technology. The new Mahindra tractors are based on three Oja platforms comprised of sub-compact, compact and small utility.
After beginning its journey in India, the Oja range will subsequently be launched across new and existing markets, said Rajesh Jejurikar, chief executive of the auto and farm sector at Mahindra & Mahindra.
“Encompassing over 25% of the global tractor industry, Oja will also signify our entry into Europe, and with Thailand serving as our gateway we are all set to enter into the Asean region,” he said.
Mr Sikka said Thailand is the largest tractor market in Asean with annual sales of about 50,000 units at present, out of 80,000 units sold in the entire Southeast Asian region.
“Thailand will be a very strategic market for us. To make it happen, the first thing is the product, and we believe our tractors built on Oja’s versatile lightweight platform will be the right product for the market and the right solution for Thai farmers which are very strong in paddy and fruit segments,” he said.
Sanjeesh Bera, Mahindra’s head of Asean business, has been assigned as the country head for Thailand and will soon start recruiting people for his team while developing a dealership network as well as a financial structure.
“With all these things in place, we will start selling products between the end of January to the early part of 2024,” said Mr Sikka, adding that tractors would be sold under the Mahindra and Mitsubishi brands.
Mahindra would import completelybuilt tractors from India to be sold in Thailand, thanks to a free-trade agreement between the two countries under which tractors are subjected to a 5% import duty.
Mahindra currently has manufacturing facilities in India, Japan, Turkey, Finland, Brazil, Nigeria, the US and Australia.
With the right products in place, Mr Sikka said Mahindra should target a minimum 5% market share in the first five years of its presence in the Thai market.
Following its launch in the Thai market, Mahindra also aims to enter Indonesia and the Philippines in 2024, he added.