Search the Internet          Tips  Sites: Finance, Investment

International Tractors sells stake to Renault

India's closely held International Tractors Ltd has sold a 20 per cent stake in the company to a unit of French automaker Renault SA, its spokesman told Reuters on Wednesday.

"We sold the stake to Renault Agriculture for Rs 440 million," the International Tractors spokesman said.

International Tractors, promoted by the Mittal family, has about a 10 per cent share of the Indian market, the world's largest. Its Sonalika brand of tractors is made at Hoshiarpur in the state of Punjab.

The spokesman said the money would be used to raise plant capacity to 30,000 a year in 2002-03 (April-March) from 20,000.

The company has plans to ramp this further to 75,000 and will spend Rs 3.0 billion on this over the next five years, he added.

International Tractors sold 14,277 tractors in the first 10 months of this financial year to January, 31.4 per cent more than the year-ago period, while overall industry sales are estimated to have slipped by 20 per cent in April-December.

The company hopes sales will touch about 18,000 tractors in the year to March, the official said.

Tractor sales of Indian companies fell 9.47 per cent to 236,076 units in the last financial year to March, figures from the Tractor Manufacturers Association show.

ITL also plans to export tractors with the help of its French partner to neighbouring markets and the United States, he added.

India is the world's largest tractor market but average tractor sizes are much smaller than those found in western markets because of the small size of land holdings in the country.

Tell us what you think of this report