Mahindras Farm Equipment Sector, a market leader in India, signed an agreement on August 18 to form a joint venture with Jiangsu Yueda Yancheng Tractor Manufacturing Co. Ltd. (Yancheng Tractor). The value of the transaction is $50 million and Mahindra will hold 51%.
"I have always believed that India and China have unique and complementary strengths, which, when pooled together, can take on the world. We already have a successful Joint Venture with Jiangling Tractor Co. The joint venture between M&M and Yancheng Tractor will further combine Indian entrepreneurial and managerial skills with Chinese competitiveness and efficiency," said Anand Mahindra, Managing Director, Mahindra Group.
The tractor industry (domestic and export) in China has grown from about 56,000 tractors in 2003 to 2,200,000 tractors in 2007, a CAGR of 40%, according to a company statement.
Yancheng Tractor, located in Yancheng city, Jiangsu Province, is a State Owned Enterprise and sells tractors under the brand name of Huanghai Jinma which is the third largest tractor brand in China in terms of volumes sold in 2007. The company is also a leading exporter of tractors from China, with a footprint in more than 60 countries including the U.S., South America, Russia, Europe and Africa.
Mahindra (China) Tractor Co. Ltd. manufactures tractors for the Chinese market and exports tractors to the U.S. and other western nations. M&M has a 100% subsidiary, Mahindra USA, with three assembly plants catering to the American market.