CLAAS, one of the leading global farm machinery companies, entered India two decades ago. The company’s technologically advanced machines got wide acceptance in the large size farm holdings in the Northern and Southern regions of the country. Began manufacturing with a local partner, after 10 years of its operations, the company had set up its own state-of-the-art manufacturing plant in Chandigarh.
CLAAS group has been manufacturing harvesters for rice and other crops, and tractors for over 100 years. It has combine harvesters and forage harvesters for human consumption and animal fodder, respectively. Its green line equipments process fodder and create silage for dairy farming. Some of them are self-operated while others are pulled by tractors.
The company is mainly dealing with combine harvesters. The CROP TIGER 30 terra trac and CROP TIGER 40 terra trac combine harvesters run on rubber tracks. They are required for harvesting paddy in wet and slushy fields. For dry fields, primarily for wheat harvesting, the company has CROP TIGER 30 Wheel and CROP TIGER 40 Wheel combine harvesters.
For other products like MARKANT Balers and PADDY PANTHER rice transplanters, the company has developed niche markets in Punjab, Tamil Nadu, Andhra Pradesh and Kerala.
The ‘Dry’ Effect
The Indian agriculture is largely monsoon dependent. With rainfall below average across most parts of the country, the impact on the sales of agri-machinery is clearly visible.
However, to counter this challenge, CLAAS has taken several initiatives. With a strong distribution network, its dealers deploy salesmen who sell field-to-field, engage with individual farmers, close sales and ensure after-sales services. “The real value of our rural distribution network lies in the relationships our dealers have built with customers. Special promotional schemes and campaigns are rolled out by the company that makes it easier for the farmers to owe CLAAS machines,” says Dinesh Nain, Head of Market Development, CLAAS Agricultural Machinery, India.
As every farmer cannot afford the high cost machines, CLAAS focuses on ‘custom hiring’ model. It has been the core of its business model in India. In addition to this, the government’s support to develop custom hiring has helped its business model. The farmers need not to invest in expensive machines during poor monsoons for limited use in own fields for small time windows of agricultural processes, such as sowing, transplanting and harvesting.
“Our business model is based on custom hiring. Our customers are mostly the contractors. They understand our business model and the requirements of farmers. They have grown from the farmers, started owning machines and then started providing machines on hiring,” Nain says.
Roadblock in reaching farmers
The farmers belong to rural areas where connectivity is still a problem. Digital communication is comparatively low in these areas. However, it is the best source of reaching out to any customer base, says the CLAAS official.
Further, the company is using other mediums like rural melas, farmer gatherings, road-shows among other tools to reach out to the farming community. At the same time, the company ensures that its dealers are based in close proximity to the farmers thus ensuring prompt service and availability of parts.
CLAAS has a distribution network of 55 dealers in India. They are equipped with company trained manpower to provide sales and after sales support. It is aggressively focusing on increasing its footprint. In order to offer better brand experience to both existing and potential customers, CLAAS has opened exclusive state-of-the-art showrooms and workshops which are supported by latest machines and competent staff.
To support after-sale services, the company is having nine CLAAS academies – two of its own and seven MoUs with some of Government agri institutes. These institutes provide comprehensive training to operators and customers. CLAAS ensures a plethora of services through service camps, trainings, customer clinics, product demos and mobile service camps that seem to have become a way of life.
To provide financing support to its customers, over the years, the German farm machinery manufacturer has built its relationship with several banks and non banking financial institutions such as L&T, Sundaram, ICICI Bank, Magma, Kotak Mahindra Bank, among others. These financing institutions design personalised schemes that help customers procure CLAAS machines. The company has a dedicated retail finance team that ensures hassle free financing to the customers.
For CLAAS, year 2016 is going to be a challenging year in terms of overall business growth, mainly on account of not-so-good monsoon last year. It can be easily assessed by 20-25 percent fall in tractor industry, the new year is going to pose a serious challenge to all agri-machinery manufacturers. However, the company is quite enthusiastic about its new products on the block, like DOMINATOR 40 Straw Walker Combine Harvester and JAGUAR forage harvester. The company expects that these new offerings will keep continue its sales on upward trajectory. In addition, the company is also focusing to expand the number of its custom hiring centres for additional revenue generation.