Tractor demand in India is expected to increase, in turn implying that demand for tractor lubricants would continue to grow at healthy rates, Jambaulikar said in a presentation at the ICIS Indian Base Oils & Lubricants Conference in April. India sold more than 600,000 tractors in 2016, Afton estimated.

Though the country has a stronger appetite for passenger car engine oils and lubes for two-wheelers such as motorcycles, India consumed over 79,000 tons of tractor fluids last year, Jambaulikar said.

Engine oils-which include superuniversal tractor oils (used for engines, transmissions, final drives, wet brakes and hydraulics) and dedicated engine oils-took up 49 percent of tractor fluid demand, as did gear and transmission fluids such as super universal oils, universaltractortransmission oils and dedicated sump oils; the remaining 2 percent was made up by other tractor oils. Approximately 80 percent of tractor lubricants are sold in the bazaar segment, as Indias farmers often dont have access to service stations or workshops, he pointed out.

Tractor equipment is also becoming more sophisticated. Demand is gradually shifting to oil-immersed brakes for tractors with more than 41 horsepower, which accounted for around half of Indias tractor sales in 2016. The 41-to-50 horsepower segment witnessed 20 percent growth in demand for universal tractor transmission oils, which are key in wet-brake systems. Growth in the higher horsepower segment is driven by increased usage of implements requiring higher power, and usage of tractors for heavy-load transportation, Jambaulikar explained.

The Lay of the Land

The agriculture sector accounts for 18 percent of Indias gross domestic product, and the annual monsoon season is the lifeblood for its farm-dependent, $2 trillion economy. The country gets over 70 percent of its annual rainfall during the four-month season between June and September, so monsoon is crucial for an estimated 263 million farmers, Afton noted.

A normal to above-normal and well-distributed monsoon rain boosts farm output and farmers incomes, thereby increasing demand for consumer and automotive products in rural markets. With normal monsoon seasons, the tractor industry is looking at almost 15 percent growth in sales next year, with an additional 10 percent growth over the following two years, Jambaulikar projected.

The relation to agriculture and its growth is very heavily connected to having a good monsoon. Theres a direct connection to tractor sales with a normal monsoon, he reiterated.

While there are more than 7 million tractors in India, only one-fourth of cultivable land is farmed with machinery. Indias growing population and shrinking farm land are driving a rapid transition toward agriculture mechanization, as both the government and farmers seek to boost crop productivity. Therefore, growth potential for equipment sales and tractor lubes is enormous if the remaining land also comes under mechanization, Jambaulikar said.

Despite being the worlds largest tractor market, Indias adoption of tractors is not uniform. Per 1,000 hectares (nearly 2,500 acres), India averages about 15 tractors, whereas countries like Japan have 450, he noted. Mechanization in Indias northern region-which uses about 20 to 25 tractors per 1,000 hectares-has happened in a much bigger way, whereas in the south, only 10 tractors are used in the same size area.

The northern states are more or less saturated, with new sales being replacement demand, while the penetration in southern states is quite low. So the biggest scope for tractors [growth] will be in the south, Jambaulikar said, adding that tractor penetration in India can easily double to 30 tractors per 1,000 hectares over the next 10 years.

Surveying the Field

To tap demand growth for tractor oils, its necessary to understand the mindset of farmers and end-users, the senior regional manager noted. With that in mind, Afton commissioned a survey interviewing owners of tractors with more than 40 horsepower and oil-immersed brakes sold after the year 2000.

The survey spanned the states of Uttar Pradesh, Punjab, Andhra Pradesh, Maharashtra, Odisha and Madhya Pradesh, and covered both dry and wet farming practices. Indias northern region uses dry farming methods for the hard grounds in parts of the country that depend on rainfall, whereas southern states use wet farming techniques for water-saturated areas.

The survey asked 80 Indian farmers and 10 mechanics a slew of questions regarding how and from whom they buy fluids for their equipment, and sought to understand standard maintenance practices across different tractor types and usages. LubesnGreases also obtained comments from several tractor operators and mechanics in India.

Most tractors are used in agricultural operations, said Jambaulikar, but India also uses tractors for non-farming applications such as haulage, transportation and utility. The tractor has evolved into a multi-functional piece of equipment, he explained. Today, approximately 30 percent of Indias tractors are used in non-farming applications.

The first insight was quite unlikely, Jambaulikar said: Farmers consider tractors to be a part of their family. As a solution for poor labor availability and a means to minimize labor expenses, tractors are used more than ever for daily transportation needs and even for activities such as weddings, he added.

Ganesh Somani, a farmer from the Akola district of Maharashtra, confirmed the sentiment in a conversation with LubesnGreases. The tractor helps us save labor costs and also time in completing field work. It is like a family member because it gives us continuous income. We pray to our tractors daily before starting work.

Jambaulikar said improvements in tractor technology have brought huge success for farmers, who therefore have an emotional bond with them. The tractor is no longer a piece of equipment used on a seasonal basis, but rather has evolved into a multi-functional workhorse. Its a piece of equipment that is considerably used all around the year because it is making money even when it is not on the field, he noted.

Sowing Brand Awareness

When it comes to learning more about oil selection and tractor maintenance practices, the survey found that operators trust and are influenced the most by their peer groups and local mechanics. Sales representatives, retailers, agencies, newspapers and advertisements played a much smaller role in influencing buying decisions.

I stick to branded lubricants for my tractor due to the trust factor, and if theres any doubt I consult my friends and my mechanic, said Paras Chaurasiya, a farmer in Uttar Pradesh. However, I go with a mechanics advice only when Im convinced and feel that he doesnt have any vested interest.

Somani, the farmer from Maharashtra who has operated his tractor for the past 12 years, agreed. Those who have been using a tractor for long do come to know about tractor problems, and can tell if the mechanic is honest or not when he explains the problem and its solution.

Prakash Singh, a mechanic operating the Panesar Tractor Repair Workshop in Nabha, Punjab, said that operators follow mechanics advice, but only after a period of time spent developing a relationship. Many people who come to us, listen to us. If we do the work properly, then they will trust us and come back again, noted Singh, who has offered tractor repair services for the past 35 years.

Jambaulikar noted that lubricant suppliers would be wise to recruit mechanics as brand ambassadors.

A seller of tractor parts and related products in the Bhonti village of Madhya Pradesh elaborated. Farmers and customers trust mechanics more easily than they do shop owners, said Umashankar Gupta, who runs Jai Maa Tractor Parts. Mechanics give a genuine opinion if they are not selling any products. I have seen at least seven or eight out of 10 customers listening to mechanics advice. However, they prefer an experienced mechanic to do their repair work.

Repairs are different for tractors used in wet versus dry farming. The survey highlighted that in wet farming, the stress on universal tractor transmission oil is diminished thanks to softer ground. However, UTTO must be replaced frequently due to higher water ingress. In dry farming, the stress on UTTO is high because the tractor needs more power from hydraulics as the land is harder, and water ingress, dust and metal contamination present problems, as well. Overall maintenance costs, however, are slightly lower compared to tractors used in wet farming.

Tractor operators in India generally follow original equipment manufacturer recommendations for engine oils, but they show somewhat lax behavior when it comes to following recommendations for gear oils, Jambaulikar added.

We need to change the engine oil and other things that are necessary if we have used the tractor for 250 to 300 hours in the field, said Chaurasiya, who has been using his tractor to plow fields for at least four years.

Jambaulikar said oil-immersed brake systems offer value to farmers, but the noise they make remains a sore point for tractor operators. Advanced lubricants, however, can reduce noise in addition to providing lubricity.

A Market Ripe for Picking

The Indian government has also been capitalizing on the potential of the farming industry and hopes to boost productivity through initiatives such as the Make in India policy, launched in 2014 by Prime Minister Narendra Modi to incentivize foreign investments in Indias manufacturing sector.

Jambaulikar said that the countrys economy has several advantages that could lead to growth of its different segments, including a young workforce, relatively low labor costs and strong technical and engineering capacity. In addition, the government has also brought out initiatives to increase the affordability of tractors for small and marginal farming operations, as well as provide its rural population with appropriate skillsets to operate equipment in different segments, such as agriculture.

The growth potential of Indias tractor market has not been lost on global OEMs including John Deere, CNH Industrial, Deutz-Fahr and Kubota, which set up shops in the country several years ago. Theyre now in a better position to capture market share, although growth opportunity will lure more foreign OEMs to set up local manufacturing plants, Jambaulikar said. Indian manufacturers such as Mahindra and Mahindra have also enhanced their footprint in the tractor market.

Tractor rental services are another key factor expected to drive growth. Jambaulikar said OEMs like Mahindra, which launched an organized farm equipment rental service called Trringo last year, are offering the services specifically for end-users who dont see buying tractors as an attractive proposition. There is also an option available to the members of cooperative societies to lease tractors. This is something that will take off in a big way going forward, he emphasized.