SAS Motors ruses direct marketing to re-launch small new tractor

Small tractor to be relaunched through direct marketing. After experiencing a dip in sales post 2007 in the absence of a marketing boost, agricultural equipment maker SAS Motors is staging a comeback by re-launching its small tractor Angad in 15hp, 22hp and 35hp this year. It has simultaneously re-engineered its marketing strategy that was a major lacunae and has dispensed with its traditional dealer network that escalated product costs.

The Angad tractor, initially promoted as a low cost product and priced at around Rs 100,000 to help farmers in rural areas, sold 5,000 units. But the marketing plan lost its focus when dealers upped their margins and managing the support network became untenable. However, the service network has continued to support past sales. Since then, the Gurgaon-based company has done a rethink and decided to adopt a direct marketing approach based on an in-house hub methodology. It is exploring the setting up of 50 hubs over the next two years, initially in its traditional markets of Maharashtra, Gujarat, Bihar and UP.

The hubs will operate on a new paradigm — stocking agricultural implements, two dozen tractors and spare parts. Each hub will also house a service and demonstration centre with 15 staffers. This would include engineers and sales agents who will double up as mechanics. Agents will contact farmers and prospective customers and bring them to the hub to witness the demonstration and customise the machine as per their requirements. Each hub will cater to around six districts and display a 30-range product line. Kicking off the project with a hub in Nashik, SAS Motors plans to set up five such hubs this year.

According to Ravindra Kumar, managing director of SAS Motors, there will also be a plough powered by a diesel engine. He said that the work on the system and processes of the hub has been undertaken at Varanasi, where agricultural operations are primitive and marked with limited tractors. The company is investing around Rs 5 crore on the hubs that Kumar says would be primarily funded out of his personal savings. Kumar, a marketing professional, runs a textile business and hails from a farming background but has hired a team of agricultural experts to assist him on the tractor project. To profile the product, the company’s low cost tractors are believed to ensure 25 percent savings in terms of fuel consumption and are almost 40 percent lower priced than other currently available tractors.

“They are very versatile, can tap upto 2200rpm and can work on all terrain,” adds Kumar. The relaunched tractors will be priced at Rs 2 lakh (22hp), Rs 3.5 lakh (35hp) and around Rs 1.25 lakh (15hp). Rival Mahindra’s 15hp Yuvraj tractor sells for around Rs 1.75 lakh.

Chinese parts

SAS Motors has been sourcing the components for the tractors from China through its wholly owned subsidiary which sources, aggregrates, integrates with the supply chain and modifies the components for the Indian requirements in China. An assembly facility at Gurgaon assembles the parts and has a production capacity of 20 tractors per day. “The China subsidiary can aggregrate hundreds per day,” points out Kumar. About 80 percent of the parts are sourced from China currently with the local content including battery and alternators. Kumar says it is not commercially viable to manufacture tractors in India unless adequate volumes exist. “We don’t have any competitive objectives, we just want to make a difference to the rural sector with low cost tractors,” he concludes.