In a 21st-century world order, it is not just the governments or militaries of the two countries that compete. The real race might be between the leading companies- the software giants and hardware manufacturers of the two countries. Over the past three decades, Chinese manufacturers have expanded their footprints all across the world, while Indian companies are now trying to catch up.
But there is one sector where the Indian manufacturers have beaten China, viz. tractors.
As Latin American and African economies have started growing, there has been a natural shift towards mechanised agriculture. Tractors are the most basic and important equipment powering revolutions in the agricultural sector. India and China are competing for greater access into these new Agri-ware markets. India is, of course, led by Mahindra & Mahindra- the biggest tractor-maker in the world that accounts for 25 per cent of India’s local production.
India is still not amongst the biggest tractor exporters in the world, despite being the largest tractor maker. The country has a huge market to handle back home which restricts the quantum of exports. But the tractors industry led by Mahindra has already gained an advantage over China in future markets- Africa and Latin America.
When it comes to Africa, Global Times, the infamous mouthpiece of the Chinese Communist Party (CCP) and a Chinese Foreign Ministry overhang also admits that Indian tractors sell better than the Chinese ones.
Li Tie, the Chairman of Shanghai-based CAMCO company, which is involved in agricultural machinery business in Africa said, “Agricultural machinery, made in India, may account for about a 15 percent of market share in Zambia, while those from China are around 15 percent to 25 percent.”
Li added, “While looking at the specific category of agricultural tractors, India’s advantage is more obvious, with its share in Africa possibly doubles that of Chinese manufactured tractors.”
Mahindra & Mahindra has, of course, reaped major benefits out of Africa’s growing farm sector. China’s agricultural industry agrees that Mahindra & Mahindra has dominated the tractors industry.
Liu Hanwu, Chairman of Beijing-based Debont Corp, also deals in supply of Chinese agricultural equipment in Africa. Hanwu says, “Major Indian brands, particularly Mahindra & Mahindra, are quite popular among African farmers, and they have quite good quality and reliability.”
The Anand Mahindra-led automobile company is a trusted brand in Africa which is helping it shore up its tractor sales in Africa. It maintains a very good rapport with dealers and its marketing strategy has been helping its ambitions in Africa.
Next on Mahindra’s radar is Latin America insofar tractor sales are concerned. There are many prolific agricultural markets here. The bigger ones being Mexico, Argentina and Brazil. The Anand Mahindra-led company is also targeting Chile.
This is in line with the automobile company’s ambitions of drawing at least half of its overall tractor revenues from overseas markets. As of 2019, revenue from locations abroad made up only 33 per cent of the company’s overall tractor revenues. The automobile giant wants to increase the share of overseas tractor revenues in the next 5-7 years.
Therefore, in the coming years, we are bound to see Mahindra tractors expanding their footprints into unexplored parts of the world. The company has been looking to set up bases in other parts of the world anyway.
It was reported in 2018 that Mahindra & Mahindra would form a Joint Venture with a Brazilian enterprise. This would help the Indian company match the growing demand in Latin America.
The automaker is also eyeing the American market. Mahindra wants a greenfield manufacturing facility in the US that would function under its subsidiary Mahindra USA. Anand Mahindra is optimistic about meeting the growing tractor demand in the largest economy of the world.
Chinese tractors are no match for Mahindra tractors that are tough, durable and have been groomed in a competitive agricultural market of India with a multitude of tractor-makers.
Mahindra has a reputation for making ‘toughest tractors in the world’. Cleo Franklin, Chief Marketing Officer and Vice-President (Strategic Planning), Mahindra North America said, “Rivals can copy when it comes to schemes and offers, over a period of time, but building a tractor that’s tougher than Mahindra at current price points can never be done by our competitors.”
Mahindra also wants to go solo and tap into China’s 25 US billion dollars agricultural equipment market. For the first time, an Indian manufacturing giant could end up denting Chinese manufacturing companies in their own backyard.
Mahindra & Mahindra has some major ambitions in farm sector machinery and the tractors market in particular. It wants to become a giant that takes the global tractors market firmly in its grip. Ultimately, Mahindra & Mahindra might come up with bases around the world in order to increase its production capacities exponentially. This is crucial for India as Mahindra is the key to winning the tractors battle against China.