Coming cheap

Calcutta, Dec. 13: SAS Motors plans to introduce tractors at less than half the market price to make them affordable for farmers with small land holdings.

“We are looking at introducing innovative, cost effective tractors and other rural transport vehicles (RTV), including electric three-wheelers. We will source components mainly from southeast Asia and assemble and test them in our multiple production lines across the country. We already have such units in Baramati near Pune and Bhopal. We will set up one at Arambagh in the Hooghly district of Bengal. Each unit entails an investment of around Rs 3 to Rs 4 crore,” said Gautam Das, executive vice-president of SAS Motors.

SAS Motors will get technological support from a Chinese company it had acquired in March 2006. The company formed in China, Laying SAS Motors, will partially assemble, test and design low-cost models. These will then be brought to the facilities in India.

The Chinese company has an assembling and testing capacity of 10 lakh vehicles, including 2.5 lakh tractors.

Each of the units at Baramati and Bhopal has a capacity of 200 vehicles per month. Initially, the Arambagh unit will have a monthly capacity of 100 vehicles.

The company today launched the Angad 240-D, a 22hp tractor priced at Rs 1.5 lakh, in Bengal.

A 35hp tractor costs Rs 4 lakh. However, SAS is working on a 35hp model, which will cost around Rs 2.5 lakh.

While tractor financing for most banks tends to add to their non-performing assets, the Angad is the only model for which loans are available from the Prime Minister’s Rozgar Yojana.

Around 90 per cent of the tractors in the country are bought through bank financing. However, the eligibility criteria includes a minimum land holding area between 1.5 and 2.5 hectares, whereas 80 per cent farmers have smaller holdings.