As global farm equipment manufacturer AGCO seeks a new beginning in India, Rohit Kohli, brand lead for Massey Ferguson, shares his views on the Indian market and the company’s plans for the same.
02 Dec 2024 | 12697 Views | By Yukta Mudgal
As India's agricultural sector stands at the cusp of transformative growth, AGCO's Massey Ferguson brand finds itself navigating both challenges and opportunities in the world's largest tractor market. In an extensive interview, Rohit Kohli, senior manager of global marketing and brand lead for Massey Ferguson in India, discusses the industry's ...
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As India's agricultural sector stands at the cusp of transformative growth, AGCO's Massey Ferguson brand finds itself navigating both challenges and opportunities in the world's largest tractor market. In an extensive interview, Rohit Kohli, senior manager of global marketing and brand lead for Massey Ferguson in India, discusses the industry's trajectory, recent legal developments, and AGCO's vision for the future.
The conversation comes at a pivotal moment for AGCO in India, following its move to terminate its long-standing partnership with TAFE and a legal battle in the Madras High Court regarding the Massey Ferguson trademark. With over a million Massey Ferguson-branded tractors currently operating across India and a heritage dating back to the 1950s, Kohli sheds light on how AGCO plans to maintain its presence in Indian agriculture.
How do you expect the tractor industry to grow in India during FY25?
India's tractor market, the largest in the world, continues to showcase resilience and robust potential. Despite a global downcycle in the farm equipment sector, India has experienced approximately 5% year-on-year growth in tractor shipments until October FY25. We expect this trend to continue and conclude the year with net positive growth compared to FY24.
How do you characterise the sales performance of the tractor industry over the last few years since COVID?
The tractor industry has shown remarkable resilience in the post-COVID era, recovering swiftly owing to the indispensable nature of agriculture. While the pandemic created temporary disruptions in manufacturing and agricultural supply chains, the tractor industry not only sustained but also grew in the post-pandemic phase to reach a historic high of 9.45 million units in FY23.
This growth highlights the importance of strengthening manufacturing supply chains and agricultural infrastructure. For AGCO, this period reinforced the commitment to supporting farmers with dependable and efficient equipment. AGCO's Massey Ferguson brand stood out as a trusted partner, enabling Indian farmers to sustain and even improve productivity during these challenging times.
How do you assess the demand for tractors in rural India, and what key factors are influencing the rural economy?
The key factors affecting the rural economy in India remain consistent with global trends, which include commodity prices (or Minimum Support Prices in India's case), crop yields, government spending on rural infrastructure and the agriculture sector, availability of finance and machine ageing.
Monsoons in India also play a crucial role in boosting tractor demand and the overall rural economy. Additionally, events such as changes in emission regulations, government subsidies and special projects may stimulate demand. It is also important to consider farmers' aspirations for modern yet efficient technologies that complement these factors in driving demand for new farm machinery.
What are your plans for expansion in India?
AGCO's Massey Ferguson brand has been a cornerstone of India's agricultural landscape since the early 1950s, with over one million Massey Ferguson-branded tractors in operation across the country today. The…Global Capability Centre in Pune and a Digital Capability Centre in Bengaluru...leverage India's skilled talent and innovation to drive transformation and develop smart farming solutions that shape the future of agriculture.
AGCO India has also built a robust local supply chain, collaborating with nearly 50 suppliers to support our manufacturing needs. AGCO remains dedicated to addressing the diverse needs of Indian farmers. We are confident we will find a path forward that will allow us to provide the products, service and support farmers and dealers expect from our Massey Ferguson brand in India.
What is the outlook for growth in the coming 5-10 years?
India's agricultural sector is poised for transformative growth, with mechanisation playing a crucial role in shaping its future. AGCO is committed to leading this evolution, offering reliable, high-quality equipment to Indian farmers through its Farmer-First strategy. AGCO's Massey Ferguson tractors are central to this progress. With our full line of farm equipment, emission-compliant & flexible-fuel engines, and modern drivelines, Massey Ferguson is well poised to support the next wave of farm mechanisation growth in India.
Please help us understand the latest court ruling on the TAFE-AGCO case. AGCO says the ruling is in its favour. Since both parties say the verdict is in their favour, can we assume the case is settled here? Will TAFE continue to sell the Massey Ferguson brand as earlier? Or is there going to be a change in it?
It is not settled. On 18 November, the Madras High Court overturned an interim injunction in the trademark dispute between AGCO and Tractors and Farm Equipment Limited (TAFE). The court confirmed that AGCO is the owner and proprietor of the Massey Ferguson brand and trademarks.
This recent court decision adds to a series of favourable rulings for AGCO, where previous claims by TAFE regarding jurisdiction, contempt of court, supply arrangements and brand ownership have all been dismissed by various courts, including the Supreme Court. The case continues, and it would be inappropriate to comment further at this stage.
TAFE has been selling Massey Ferguson for nearly six decades in India and neighbouring countries. Do you think its exit may disrupt the market for a while?
At AGCO, we recognise the importance of India in shaping the future of agriculture, and we remain fully committed to supporting Indian farmers through straightforward and dependable Massey Ferguson products. Following termination of the commercial relationship with TAFE, we continue to work on our business plans, which include a retail network strategy, to best serve Indian farmers. Aligned with our Farmer-First strategy, AGCO prioritises the needs of Indian farmers and will continue to work with partners who meet the high standards set by the historic Massey Ferguson brand.
While terminating the commercial agreements earlier this year, AGCO alleged "TAFE's continued poor operational performance as a supplier, brand licensee and distributor to AGCO." What are these poor operations?
At AGCO, we continually review supplier performance. AGCO's termination of the commercial arrangements with TAFE earlier this year was driven by several ongoing concerns regarding TAFE's operational performance as a supplier, brand licensee and distributor. These issues primarily revolved around a lack of focus on AGCO customers, particularly in key markets, and challenges with new product introductions, late deliveries and pricing.
Despite repeated assurances from TAFE to address these concerns, including recurring issues that directly impact the service to farmers, AGCO found meaningful progress was lacking. As a result, AGCO felt the need to take decisive action to protect its commitment to its customers and ensure the continued availability of reliable and high-quality Massey Ferguson equipment in India.
AGCO is focused on strengthening its operations and partnerships in India to ensure Indian farmers and dealers benefit from the global excellence that Massey Ferguson represents. The company is optimistic about advancing its vision for agriculture in India through new partnerships and enhanced distribution strategies.