The last four-five years have been good for John Deere in India. The company will continue to focus on providing complete solutions by leveraging its technical and manufacturing capabilities to grow, Satish Nadiger, Managing Director of John Deere India told AutoParts Asia in an interview. He also spoke about the journey of the company so far, the future growth drivers and the acceptance of new technologies by the Indian farmers. The Excerpts:
Q: How do you describe the last 20 years for John Deere in India?
A: We started the company as a 50:50 joint venture with Larsen & Tourbo (L&T) in a small apartment in Pune in 1997, and in 2000, we opened our first manufacturing plant, John Deere India Pune Works. The year 2005 was a milestone for us. We established the John Deere Technology Centre in 2005 in Pune, and at the end of the same year we bought out the L&T share. After 2012, we opened our second tractor manufacturing plant, combined harvester manufacturing unit and introduced a few technologies for the first time in India.
Four key factors — quality, technology, manufacturing capacities and workforce- have been instrumental for our growth in these years. Technology-wise I can say John Deere is among the best, but the question was to bring the right technology to the market place at the right price. Quality of our products has always been strong. Along with quality and technology, India has been a strong manufacturing base and that has helped us to offer the right products to the markets. Of course, people are an asset, there are employees who have been with the company for around two decades and now in senior positions. These factors have helped us grow in the last 20 years.
Q: What factors will fuel growth for John Deere in India in the next decade?
A: What we have done in the last four to five years in India has given a momentum to our growth. Currently, we have the best product portfolio in India, but we will have to continue to innovate products and see what can be done. I can say right now we have the strongest portfolio we ever had in terms of quality and range. Currently, we manufacture up to 75 HP tractors, and import 100 HP to 120 HP tractors. Most of the products are designed in India as per the needs of local and export markets. We have processes to acquire the customers’ requirements, which help us understand the markets’ needs.
We have also increased the local content in the products that we manufacture in India. The localisation rate in the tractors we sell in India is around 98 percent. For the export markets, it would be 80-85 percent because we still have to import some components on emission and cab sides. But overall, we are having a good journey of localisation.
Q: Who are your largest customers, farmers or contractors; how has been the acceptance of your new technologies?
A: Every farmer is a contractor in India in one or the other way. Farmers in India use their tractors predominantly for their own purposes and then give it on rent. Most of the farmers rent out around 30 percent of their tractor time. The Indian customers are now getting aware of the new technologies and they appreciate our products. I can tell you that some of our products that we introduced such as four-wheel drive tractors have been well accepted. The 45-HP four-wheel drive tractors we launched in the paddy belt have been very successful though they are more expensive than two-wheel drive tractors.
Another example is power reverser tractors. In this, the operator has to just push up a button and he can go back and forth. These tractors are ideal for loaders and ginning applications. Our tractor-mounted harvesters have captured a good position in South India. Initially people were sceptical about the need for power steering in tractors. Still we brought it to the market and now everybody is offering it. Right now, dry clutches of tractors have to be changed after 800 hours to 900 hours. We are bringing in wet clutches which can run up to 4,000 hours to 6,000 hours, which is equal to about five-year warranty. The customers who understand technologies really appreciate our products.
Q: What makes the John Deere financing service different?
A: Our interest rates are competitive, but if there are areas where we want to penetrate, we offer subsidies in the interest rates. To have better transparency, we do have agreements available in various languages suitable for the customers’ preference.
Q: What are the challenges on the dealers’ side?
A: Our dealers’ longevity is much better than our peers due to transparency in dealing with them. We have 525 dealers and about 1,000 touch points located across the country. We are transparent and respectful to each other. Our network channels are relatively strong in the south and now our channels in Uttar Pradesh, Madhya Pradesh and Bihar are growing, but we need to do better there. The channel partners must have working capital and the capacity to manage their inventories and to serve the customers. They also need to have capabilities of understanding our technologies, selling points and make sure to go on the ground and talk to farmers and demonstrate the products.
Q: How has been the support from the parent company?
A: India is an important and growing market for the parent company. John Deere is very excited about what is happening in India. We get an excellent support for R&D and for investments we have put in.
Q: How many vendors do you have?
A: For regular parts, we have 250 plus vendors in our supply chain. We also supply components such as engine, transmission manufactured here to our sister factories. Our vendors, under our global sourcing programme, also supply components to our factories around the globe.
Q: What are the USPs of your manufacturing plants that can be highlighted?
A: Quality, we can totally rely on the products that come out of our factories. Quality of our tractors made in India is as good as tractors made in any of our other factories in the world. Our design and engineering capabilities and processes adhere to JD production quality.
Q: What is your vision?
A: India is very important for our tractors and other products. We will continue to focus on supplying solutions and leverage our manufacturing capabilities to grow.