Assignment MM: VANRAJ Mini-Tractors
Why would a farmer buy a mini-tractor instead of a big tractor?
Below are some of the factors influencing the purchase of mini-tractor.
• Higher the horsepower of a tractor, more the usage of Diesel: Mini-tractor consumes about 1.5 litres/hour while the larger ones need a spent of 4litres/hour. There is a saving of about 60% on fuel costs.
• Mini-tractors are priced affordably for the farmer compared to the big tractor – typical 25% savings.
• Tractors are mostly financed (90%) thru banks and at cheap rates. However there was gross under-utilization of the bigger tractors for smaller area of land requiring longer break-even period and eventually leading to higher rates of default on loan repayments. A mini-tractor thus will be more efficient in utilization and break-even can be easily optimized.
• Mini-tractors being an integrated (single piece casting) design structure is low on maintenance – its lifetime service and repair charges are only ~15% of ASP.
• Its smaller wheel base and turning radius offered better maneuverability and control and its size made it accessible to all corners of the land.
Is Vanraj a viable product?
Yes. There is a market available for this low power tractor. The smallest tractors currently selling in the market are in the 21-30 HP range and generally cost upwards of Rs. 0.24Mn. Vanraj can perform almost all the functions of the big tractors at lower costs and have equal lifespan with lower maintenance cost. It can also be used for non-farming purposes with little or no modifications technologically. The "Vanraj" 10 HP tractor has the potential of filling this ...