Mumbai, Aug 18: Mahindra's Farm Equipment Sector, one of the world's top tractor brands and the market leader in India, on Monday, Aug 18 signed an agreement to form a joint venture (JV) in China with Jiangsu Yueda Yancheng Tractor Manufacturing Co Ltd (Yancheng Tractor), a leading Chinese tractor manufacturer.
The tractor related assets and current liabilities of Yancheng Tractors valued at USD 50 million would be transferred to the joint venture, the company said in a release here. Mahindra would hold 51 per cent (outlay approx. USD 26 million) in the JV through its subsidiary, Mahindra Overseas Investment Company (Mauritius) Ltd (MOICML). The transaction was subject to receipt of necessary approvals.
This would be the second tractor venture of Mahindra in China, in addition to Mahindra's current tractor business namely, Mahindra China Tractor Company Ltd (MCTCL). Yancheng Tractor's Huanghai Jinma brand is the number 3 tractor brand in China in terms of tractor volumes in 2007.
Anand Mahindra, Vice Chairman &Managing Director of Mahindra Group, commenting on the development said ''I have always believed that India and China have unique and complementary strengths, which, when pooled together, can take on the world. We already have a successful Joint Venture with Jiangling Tractor Company. The JV between M&M and Yancheng Tractor 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.'' Shao Yong, President of Yueda Group, said ''We are delighted to partner with Mahindra and look forward to a successful joint venture. The JV stands to gain by the operational excellence, international sales and distribution network and R&D capabilities of Mahindra and will eventually lead to the creation of China's leading tractor company.''