Mahindra Yueda Yancheng Tractor Company inaugurated in China

Anand Mahindra, Vice Chairman & Managing Director, Mahindra Group, and Hu Youlin, Chairman of Yueda Group, recently inaugurated a tractor joint venture formed between the two companies. The new company – Mahindra Yueda Yancheng Tractor Company (MYYTCL) – has been formed by an alliance between Mahindra’s Farm Equipment Sector and Jiangsu Yueda Yancheng Tractor Manufacturing Co. Ltd., a leading Chinese tractor manufacturer. Mahindra holds 51% share in the JV through its subsidiary, Mahindra Overseas Investment Company (Mauritius) Ltd.

This is M&M’s second tractor venture in China, the first one being Mahindra China Tractor Company Ltd. (MCTCL). With MCTCL’s Feng Shou and MYYTCL’s Jinma brands, Mahindra’s tractor operations in China position it well to exploit the fast growing tractor market in that country.

‘We already have a successful Joint Venture with Jiangling Tractor Company. This JV between M&M and Yueda Groups will further combine Indian entrepreneurial and managerial skills with Chinese competitiveness and efficiency. I am sure this formidable combination will contribute substantially towards realising our ambition to be the leading tractor manufacturer in the global market,’ said Anand Mahindra. ‘This JV stands to gain by the operational excellence, international sales and distribution network, and R&D capabilities of Mahindra, and the distribution competence and manufacturing strength of Yueda. It will eventually lead to the creation of China’s leading tractor company. We are delighted to inaugurate this JV with Mahindra,’ added Hu Youlin.

The tractor industry (domestic and export) in China has grown from about 56,000 tractors in calendar year 2003 to 222,000 tractors in 2008, a CAGR of 32 percent. The new agriculture policy introduced by the government in 2004 has played a major role in this growth, with a number of positive measures including abolition of tax on agriculture, boosting growth.

The new JV’s manufacturing facility is located in Yancheng city, in the Jiangsu Province. The product portfolio comprises tractors ranging from 16 HP to 125 HP. MYYTCL will have a strong distribution network covering over 25 provinces in China and will also build on the existing exports operations, with a footprint in more than 60 countries including the US, South America, Russia, Europe and Africa.