Auto India, Car India

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Yesterday Mahindra & Mahindra, the Tractor Major announced that they are planning to pick up 51 percent stake in recently formed JV with Chinese firm Jiangsu Yueda Yancheng Tractor Making Co. Mahindra & Mahindra will invest around $26 million in JV, which will get Yueda’s tractor related assets and existing liabilities for a $50 million.

M&M will hold 51 percent in a joint venture through its subsidiary, Mahindra Overseas Investment Company (Mauritius) Ltd.

With this move, M&M will be a step closer to global number one place. Indian Auto heavyweight already builds tractors in the China through a Mahindra China Tractor Co, where it holds 80 percent stake in a JV with the Jiangling Motors.

For a long time we have aspired to become the No. 1 tractor manufacturer in the world. With this new alliance, we would be able to achieve that goal more rapidly.

- MR. Anand Mahindra (VC and MD, M&M) said.

Mahindra & Mahindra, including Punjab Tractors and Chinese and United States operations will have a overall capacity of about 1.75 lakh to 1.8 lakh tractors, which takes it very close to the present world tractor head John Deere. John Deere sold a 1.6 lakh tractors in 2007 year.

Along with our current operation in Nanchang, we will have a much larger and a cost-effective manufacturing base on which we plan to build our business in China and other overseas markets.

- Mr. Anjanikumar Choudhari (President of Mahindra’s farm equipment sector) said.

With 42 percent market share in India, the gaining of Yancheng Tractors, will boost their shared capacity to over 60K tractors/year. The company plans to attain top spot in a next 2-years as the 26K tractor sales with the Yancheng, providing it shot in a arm for its Chinese plans.

We are closing on top two Chinese tractor companies — the market leader, China No. 1 which sells 40,000 tractors and the second largest, Forton Tractors sells around 39,000 tractors in the last fiscal. The acquisition has increased our annual installed production capacity to 60,000 tractors and we are now in a firm position to gain market share in China. The company will continue to sell all the tractors brands — Jinma, FengShou and Lenar — simultaneously in the Chinese market.

- Mr. Ashok Sharma (M&M senior VP (strategic planning) Farm Equipment Sector) said.