Sonalika International Tractors Ltd, the third largest producer of tractors in India, has drawn up plans to enter China, the world’s biggest tractor market.
“This year, we will start investing to create a physical foundation in China and manufacturing can happen later,” said Raman Mittal, Executive Director, Sonalika ITL, here on Tuesday.
“We aspire to become not small, but a big player in the Chinese market. Like India, China too is a cost-sensitive market.
“So, we may have to find strategies to manage costs. Probably, we would make key technologies like powertrain in India keeping that in mind,” he said.
Revenue growth Good monsoon showers received last year helped the company grow 17 per cent in revenue to ₹4,268 crore, even though the sales were briefly affected due to demonetisation.
During 2016-17, Sonalika sold over 81,500 tractors, increasing its market share from 11.9 per cent to 12.3 per cent. “Increase in sales in Maharashtra and Southern States was a major driver for this performance,” he said.
In Maharashtra, Sonalika’s market share increased 50 per cent, from 10 per cent to 15 per cent, in the past five years, while the company is inching close to double digit market share in the South.
Exports up Last year, Sonalika exported 12,241 tractors to 80 different countries, making it the second largest tractor exporter from India.
Even though the number of units exported was lesser than that sold domestically, its revenue from export was close to 20-25 per cent of the total revenue, Mittal said. Exports grew by close to 30 per cent.
A new manufacturing plant of two lakh tractor per annum capacity has been added to its existing facility that is capable of rolling out 384 tractors daily.
Across the country, Sonalika has close to 950 dealers and 300 spare part stockists. Over the past 14 months, the company has opened 30 Sonalika skill development centres to train farmers and mechanics and 30 more such centres will be added by the end of this financial year, Mittal said.