New Delhi: Sonalika International Tractors plans to enter 10 new countries, including advanced markets like the US, Japan and South Korea, this year as it aims to grow its exports by over 20 per cent in the current fiscal year.
The Punjab-based firm, which currently sells tractors in over 80 international markets, also aims to begin local assembly operations in Iran during this calendar year.
“There are few countries which are already on our radar. We plan to enter ten new countries this year,” Sonalika International Tractors president-international operations Gaurav Saxena told PTI.
The company has developed tractors with Stage-IV emission norms and is now gearing up to enter advance markets like the US, Japan and South Korea, he added.
When asked how soon the company planned to enter these markets, he said: “In fact, the first set of tractors has already been shipped to the US market. So we should be starting to sell our tractors in the US within this year itself.”
The company has tied up with two partners in the US, catering to the North and South regions of the country.
Sonalika has set a conservative target of 1-2 per cent market share in the US market in the first year of operations.
The tractor market in the US is estimated to be around 2 lakh units per annum, with majority of requirement being for 20-90 HP tractors.
Apart from the US, Mr Saxena said the other countries that the company is looking to enter this year include Switzerland, Latvia and Mongolia, apart from Japan and South Korea.
On enhancing the company’s local assembly in global markets, he said Sonalika “will begin assembly operations in Iran with a local partner in the next 2-3 months”.
“This will be our fifth global assembly operations after Algeria, Argentina, Brazil and Cameroon,” he said.
For Iran, Mr Saxena said, “We plan to start with 20 per cent of localisation and then scale it up to 40 per cent in the next one-and-a-half years. We would be able to get subsidy from the Iranian government if we reach 40 per cent of localisation there.”
The company will begin with assembly of around 1,000 units of 26 HP, 50 HP and 175 HP tractors in Iran, he added.
On the investment for the global expansion, he said, “We have invested a total of around Rs 500 crore to upgrade technology and the new manufacturing plant in Punjab over the past 2.5 years and are now ready to serve more countries.”
Asked about exports growth, he said that during the first five months of the current fiscal year, they grew by 34 per cent while the industry reported a degrowth of 1.5 per cent.
The company sold 5,085 units during the period as against 3,757 units during the corresponding period of previous fiscal year. The rest of the tractor industry sold 31,897 units during the first five months as compared to 32,368 units earlier.
On whether the company would be able to maintain the same growth momentum in this fiscal year, Mr Saxena said: “We expect to grow over 20 per cent during the year.”
The company’s exports grew by 11 per cent in the previous fiscal year.
PTI