Mahindra and Mahindra has produced more than a hundred thousand tractors since April; that places it in a position to become the world’s largest producer. In a country better known for Lalgarh and Telangana, the news will be welcomed with some joy. Although India has the second largest population in the world, it finds it difficult to be even in the top ten in most things. Things are not so bad as they used to be: India is not one of the world’s ten poorest countries. But it does not make it to the top ten by gross domestic product either; only the stratagem of purchasing power parity takes it past little industrial countries like Germany and France and makes it number three. Mahindra and Mahindra will also be the largest producer in terms of the number of tractors; in terms of the money it gets for them, it will probably be some way from the top. But India’s competitive advantage is in being a low-cost producer; if Indian manufacturers exploit it and build on it, they are only doing what is good for them and for the country.

India is where Mahindra and Mahindra learnt to be a low-cost producer; and it continues to be Mahindra and Mahindra’s largest market. But it is not India alone that made it the world’s largest producer, for here it faces considerable competition. It was its strategy of spreading out across the world that led it to the top. And a decision to extend its reach also meant a determination to face competition from the world’s best producers. Every market is not like India’s; while buyers appreciate value for money everywhere, they do not always prefer the cheapest. Indian farms are exceptional in their small size; farms are considerably bigger elsewhere, especially in the markets where most tractors are sold. And size and power are preferred on large farms. Nor is agriculture the only market for tractors; they are useful wherever heavy objects are to be moved.

An event that made Mahindra and Mahindra popular in the United States of America was the Hurricane Katrina; its tractors proved their worth in clearing rubble. Mahindra and Mahindra is present today in most major markets except Europe. It is a surprising exception, but perhaps it does not matter so much, because the European market is not growing. There is also considerable regional specialization; tractors are different, for example, for grape farms in France and olive farms in Italy. The resulting small niche markets may not be worth fighting for. But everywhere the number of first-time buyers is shrinking; most purchases are repeat buys, where quality and technology matter. To continue expanding, Mahindra and Mahindra will have to keep offering bigger and better tractors; it will have to keep the loyalty of its old buyers, and attract new ones. It has laid a good foundation; now it must innovate further.