Buying the cheapest tractor in the country is not that easy, after all. In what was seen as a lucrative option for farmers, Angad, the cheapest tractor SAS Motors Ltd launched in November last year, has run into rough weather with authorising agencies. The company has failed to get a commercial test approved for the tractor by the Central Farm Machinery Training & Testing Institute, Budni (Madhya Pradesh) and have hence not been able to provide finance options to prospective customers.
According to sources in the industry, Angad has failed the 'full load, full throttle test' at Budni, where the tractor developed engine oil leakage during the test conducted in mid-May this year. Managing Director of SAS Motors, Ravindra Kumar, while denying this, said, 'CFMTI, Budni is not concerned with the farmers. They are compromised to the tractor lobby.
The Central Farm Machinery Training & Testing Institute test approval is a must for all tractor manufacturers in the country who want to offer finance schemes to their customers. The certification allows tractor manufacturers to get the necessary approval from the National Bank for Agricultural and Rural Development (NABARD). NABARD subsequently authorises all nationalised banks to offer finance to prospective customers.
While the first tractor was rolled out on November 11 last year, SAS Motors had sent the Angad tractor to Budni in April 2004. But owing to procedural delays on the part of CFMTI, the test procedure was not undertaken for one full year, Kumar said. The test was finally initiated in April this year and was subsequently rejected.
A visibly angry Kumar said, 'CFMTI is totally inadequate and incompetent in handling the testing. They are not concerned with the local scene, but are concerned with following the OECD (Organisation of Economic Co-operation and Development) regulations.' Kumar said the company has 14,000 finance cases pending with the banks, but have not been able to provide them because of the delay in earning the CFMTI certification.
When contacted, S C Jain, CFMTI Director said, 'Confidentiality tests are on and I can't say anything more on that as of now.' Sources also confirmed that SAS Motors has got into legal tangles with CFMTI on the matter.
At Rs 99,000, the Angad is the cheapest tractor in the country. And the company has managed to sell 1,200 units ever since its November 2004 launch. Kumar said his demand projection for the tractor was correct, but the sales projection has been below anticipation. 'Our projection was correct in terms of demand, but we had not factored in the extent of poverty among farmers,' said Kumar. He added that they are working on localisation of the tractor and by January 2006, almost 80 percent of the tractor would be locally produced. Currently, the tractor is brought in from China through its Chinese partner Shandong Shifeng and is assembled in India at Ghaziabad in Uttar Pradesh, and Baramati in Maharashtra.
The company has set-up a network of 200 dealers, but customers have been complaining of inadequate service back up from the company. Kumar said SAS Motors trains mechanics from every dealer, but sources said some of them aren't happy and at least four to five dealers have withdrawn Angad dealerships. There are complaints of non-availability of spares as well. Sources have said the tractor has problems with its components as well as assembling. Mostly, customers have been faced with problems like lubrication of gearbox, steering and axles. There are also complaints of breakage of axles and transmissions and wearing out of clutches.
While Kumar rubbishes all such statements, he claims the tractor offers the best fuel efficiency at 40 percent more than competition. He says, 'designing the implements is a challenge and we are working on it. Let the technology percolate down.
The next few months could be critical to SAS Motors' future plans for the farm equipment segment in India. While the CFMTI report is a must to get rural finance going, another big challenge for Ravindra Kumar and SAS Motors would be to win back the trust of their customers. And in a competitive scenario where several tractor manufacturers are looking at introducing budget tractors in the country, SAS Motors would need to do lot to hold on to their customers.
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