Italy's Same Deutz-Fahr is to convert its facilities in India in to a manufacturing hub of tractors for its south-east Asian, African and South Asian sales.
In addition, Same Deutz-Fahr will source engines and transmissions from India for its European operations.
Same, which sells agricultural machinery, has already invested Rs 130 crore (Rs 1.3 billion) over the last few years in its engines and tractors plants at Ranipet, near Chennai.
At a press conference on Monday, Vittorio Carozza, chairman of the Same group, said that an additional investment of $10 million (about Rs 44 crore) would be made over three to four years.
The Ranipet plants are the $1.13 billion Same's only manufacturing presence in Asia.
Same Deutz-Fahr India will make tractors of about 60 HP-70 HP with 4-wheel drives for the East Asian market and 50 HP tractors with two-wheel drives for Africa, said Kamal Bali, the company's managing director.
The engine plant at Ranipet will send about 10,000 engines for 100 HP tractors to Italy, he added.
Same's India plans include an emphasis on the domestic market. Bali said the company would increase its capacity from 7,000 units to 15,000 units over next three years. It also plans to launch a combine harvester in India.
The company estimated that its tractor sales in India would be about 3,600 units in 2005, a small fraction of the total market (domestic sales stood at about 210,000 units in 2004).
Same's gameplan for India revolves around the growing market demand for tractors with more power.
Bali said tractors with 40 HP and more are expected to have a market share of 45 per cent soon. Most new tractor models are being introduced in the 40 HP and above category, he added.
Same Deutz-Fahr India today launched two new tractors: a 55 HP tractor with a 4-wheel drive and a 35 HP tractor.
Balie said that the company expected a turnover of Rs 138 crore- Rs 150 crore (Rs 1.38-1.5 billion) in the current financial year and a cash profit of Rs 3 crore (Rs 30 million).
