PSR Power Systems Research India Private Limited (PSR India), is the India office of Power Systems Research (PSR). Our experienced analysts, including our team in India, work with OEMs, engine and component manufacturers, dealers, fleet managers and industry experts to compile model-level data that is considered the leading source of global information on engines, drivetrains and powered vehicles and equipment.
In a strategic move reminiscent of Suzuki Motor’s successful expansion strategy, Japanese agricultural equipment giant Kubota is carving out a path to global dominance by establishing India as its production nucleus. The recent acquisition of Escorts, a leading tractor manufacturer in India, marked a pivotal moment for Kubota, propelling it into a position of strength in the Indian and international markets.
Kubota’s journey in India began in 2008, albeit with sluggish growth and single-digit market share due to its specialization in lightweight tractors, which initially lacked the requisite power for Indian applications. However, with the acquisition of Escorts in 2022 and subsequent rebranding as Escorts Kubota, the company gained a significant foothold, complementing its expertise with Escorts’ established presence in the Indian market.
“India is a key market for vehicle electrification, particularly due to the government’s carbon neutrality goals, which makes securing cost competitiveness through localized battery production crucial,” Heui Won Yang, president and head of Hyundai Motor and Kia’s research and development division.
EDITOR’S NOTE: The 5th Annual TWF (Two Wheeler Forum) took place on Feb. 21 and 22, 2024, at the India International Convention & Expo Centre in Dwarka, New Delhi. Hosted in partnership with Trak N Tell, the event spotlighted aspects of the Indian two-wheeler and three-wheeler industry, spanning both electric and internal combustion engines.
The landscape of electric vehicles (EVs) in India is undergoing a transformative shift, with the recent 2 wheeler, 3 wheeler, and EV show held in Delhi showcasing the industry’s dynamic evolution. Despite constituting less than 1% of total vehicle sales, the electric vehicle sector holds immense potential, and is projected to grow to over 5% in the years to come. Currently, the Indian roads host over 5 lakh electric 2 wheelers and a modest number of electric cars. However, the market’s growth trajectory remains subject to fluctuations, predominantly influenced by governmental incentives.
The Indian government’s Budget for the fiscal year 2024-25 is emphasizing the automotive industry, with a particular focus on the electric vehicle (EV) ecosystem. The budget reflects a strong commitment to sustainability and green initiatives, aiming to position India as a leader in the global EV market.
This analysis delves into the key highlights and implications of the budget, drawing insights from industry leaders and experts. Here are highlights of Budget.
EV Ecosystem Reinforcement: The government’s pronounced emphasis on bolstering the EV ecosystem through support for the manufacturing and charging infrastructure has been met with widespread acclaim. Finance Minister Nirmala Sitharaman’s commitment to payment security mechanisms for e-buses underlines a strategic approach to encourage public transport electrification.
Ford Motor Co’s unexpected decision to retain its factory in Tamil Nadu and its potential plans for the assembly of the latest Endeavour signals a potential shift in strategy towards a stronger focus on electric vehicles (EVs) and leveraging India as an export hub.
This analysis delves into the implications of Ford’s potential emphasis on EVs and its ability to capitalize on India’s Production-Linked Incentive (PLI) schemes for exports.
Globally, under its current CEO, Jim Farley, Ford is focused on the electrification and digital transformation of core segments in which it is a leader, namely trucks, SUVs, commercial vehicles, and performance cars.
“Our aim is that with the launch of Oja (platform), we will double our export in the next three years,” says Hemant Sikka, president of Mahindra’s farm equipment sector. “So, we want to increase exports from 18,000 to 36,000 in about three years.”
In collaboration with Mitsubishi Mahindra Agriculture Machinery, Japan, and an investment of INR 1200 crore, the new Oja platform could help Mahindra win 25% of the worldwide tractor demand. This includes tapping into new markets such as Europe and ASEAN, as well as strengthening its presence in sectors like horticulture.
PSR Analysis: The launch of Mahindra Tractors’ new Oja platform underscores a strategic move with several critical business implications. First, the entry into the 80,000 unit ASEAN market represents an expansion initiative, targeting countries such as Thailand, Indonesia, and the Philippines. This move aligns with the company’s global growth strategy, capitalizing on the increasing demand for tractors in these emerging markets.
The construction equipment industry anticipates a robust 5-year outlook with a projected 15% year-on-year growth. This optimistic forecast is anchored in the momentum generated by ongoing construction projects and increased infrastructure spending. The government’s substantial allocation of $130.57 billion (Rs 10 lakh crore) underscores its commitment to fortifying this sector.
Moreover, the recognition of the scale and technological prospects within the construction landscape further emphasizes the strategic importance of advancements in this domain.
The construction equipment (CE) sector has undergone significant transformation over the past 2-3 years, marked by major players reaching peak manufacturing capacities and subsequently embarking on expansive growth initiatives.
Sonalika Group is planning to spend approximately $100 million to set up a manufacturing facility for the production of tractors aimed at the international export market. Production will be used to developing products tailored to meet customer requirements in Latin America, Europe, United States, Oceania and South Asia
“We are looking at investing $100 million to set up a dedicated facility for exports. The new unit will have total installed capacity of 100,000 units and will be commissioned within the next two years,” according to Gaurav Saxena, director and CEO of the company’s International Tractors Ltd., operation.
One-third of the group’s revenue is attributed to exports, and the organization aims to be among the world’s top three tractor brands by 2030, considering the global sale of 1.5 million tractors. Presently, ITL exports 35,000 units and has set a target to reach 100,000 units within the next seven years.
OEMs increasing their focus on the Bus sector to drive growth in the post-Covid period.
Ashok Leyland. One of India’s leading commercial vehicle manufacturers, Ashok Leyland has announced plans to invest ₹1,000 crore in setting up an integrated commercial vehicle (CV) and electric bus (e-bus) manufacturing plant in Uttar Pradesh. This plant is expected to have a planned production capacity of 2,500 buses annually, with the potential for expansion to 5,000 buses per year.
This significant investment is a strategic move for the company and carries several implications and opportunities. This critical analysis examines the key aspects of this investment decision.
“Contingent on market adoption and demand of alternative fuel vehicles in the state, Ashok Leyland intends to invest up to ₹1,000 crore in this new facility over the next few years,” says Shenu Agarwal, Ashok Leyland MD & CEO.
Under Maruti’s 3.0 Strategy, the company proposes to expand annual capacity by 2 million units within nine years, and it plans to feature 28 distinct models by 2031. The automaker aims to reach an annual production volume of more than 4 million vehicles by 2031. Of this total, approximately 15% (about 600,000 units) will be electric vehicles (EVs), and about 1 million will be hybrid units.
This represents a substantial 75% surge from the current production capacity of 2.25 million units.
Foreseeing a threefold increase in export volume to 750,000 units by FY31, Maruti intends to allocate 3.2 million units for the domestic market. The company envisions hybrids and EVs comprising approximately 40% of this portion, translating to over 1.2 million units.
