Chapter 2 Introduction

2.1. About the organization

2.2. Form of ownership
2.3 Nature of Business
2.4 Geographic Area

2.1 About the Company

The Escorts Group, with Escorts Limited as its flagship company, is among Indias
leading corporations operating in the diverse field of agri machinery, construction &
material handling equipment, automotive & railway ancillaries information
technology and financial services. The group has 15 modern manufacturing facilities
& an extensive marketing network spread across the country. The genesis of Escorts
goes back to 1944 when two brothers, Mr. H.P. Nanda and Mr. Yudi Nanda,
launched a small agency house, Escorts Agents Ltd., in Lahore. The companys
principal activities were trading and representing leading overseas manufacturers for
the sale of their products in India. One of its dealerships was for the Massey
Ferguson brand of tractors.
EL promoted Escorts Tractors Limited in 1969 as joint venture with Ford Motor
Company of USA for the manufacturing of Ford series of tractors. The tractors
manufactured were in the 45-50 HP range and ETL became the market leader in this
segment with a share of above 50%. Consequent to FMCs disposal of tractors
operations to Ford New Holland, USA, Ford new Holland acquired the shares of
FMC in ETL. Following an agreement in 1995 to end the joint venture association,
EL acquired the entire stake of ford new Holland in August 1995, making escorts
tractors ltd. a subsidiary of Escorts Ltd. Over the years, Escorts has sured ahead and
evolved into one of Indias largest conglomerates. Till 1993-94, all these activities
were being carried out in various divisions of EL. EL undertook a major
restructuring exercise between 94-98 spinning off the divisions into separate
companies. The restructuring exercise-comprised consolidation of the agrimachinery
business by merger of ETL with EL and having off various divisions into
separate companies. Bi wheeler division was spun off to Escorts Yamaha Motors
Ltd., construction equipment division to Escorts construction equipment Ltd.,
telecommunication equipment division to Escorts communication Ltd., EL booked
gains of Rs. 2091 million over the four year period 1994-95 to 1997-98 though the
sale of these the sale of these divisions. The main products of Escorts group
currently comprise of agri-machinery, information technology, health care, financial services,
railway components, auto components, construct ion and material handling
equipment.

ESCORTS HISTORY- MAJOR MILESTIONES

1944. Escorts started Escorts Agency Ltd. in Lahore.
1950 Established India first Farm Mechanization Institute at Azadpur.
Later it was shifted to Kashipur
1958 Started import MF tractors from YUGOSLAVIA for marketing in
India.
1960 A manufacturing plant was set up at Faridabad
1961 Acquired license to manufacture URSUS/ESCORTS tractors
1969 Signed a contract with Ford Motor Co. (USA) to manufacture Ford
3000 Model tractors.
Established EIFM (Escorts Institute of Farm Mechanization) at
Bangalore (India), the largest institute Asia & in the world
1971 Introduction of Ford Brand tractors.
1974 400 tractors were exported to Afghanistan.

Escorts Limited (EL) is the flagship company of one of Indias leading business
groups, the Escorts Group. The company was incorporated in 1944 and is today, a
leading manufacturer of Agri Machinery Products, Auto Suspension and Ancillary
Products, Railway Equipment and Material Handling and Construction Equipment.
The company is widely acknowledged as one of the pioneering agents of farm
mechanization in the country and has been playing a pivotal role in the socioeconomic
progress of the country for more than five decades. Escorts is known to be
an Indian multinational and has established technological and business
collaborations with leading companies across the globe. Escorts AGRI
MACHINERY GROUP (AMG) was set up in 1960 and they rolled out their batch
of tractors in 1965 under the brand name of Escorts. Today its tractors are marketed
under three brand names, viz. Escort, Powertrac and Farmtrac.
Escorts Brand of tractors is symbolic of reliability and enjoys the confidence of the
farming community for the last 40 years.
Powe rtrac Brand of tractors is the most fuel-efficient tractor in their respective
categories that offer excellent value for money and have helped the farmer improve
their quality of life.
Farmtrac Brand is the most powerful premium range of tractors that give
maximum productivity to the farmers.
As far as figures go, the company has more than 1600 sales and service units, and
footprints in over 40 countries. The management of Escorts takes great pride in their
technological expertise which has seen the company introduce more than 45
different tractor variants within the 25 to 80 HP (Horsepower) ranges, over 16000
constructions and material handling equipment and become the worlds largest
manufacturer of Pick-n-Carry cranes.
The companys in-house R&D (Research and Development) unit is spread over100,000sq. and
has been recognized by the Department of Scientific and Industrial
13
Research, Ministry of Science & Technology, Government of India for the period of
2008-2011.
In 1944 prior to the independence Escorts started as Escorts Agency Ltd. in Lahore.
In 1965 the first batch of tractors from Escort Agri Machinery Group
came out on the field with the brand name of Escort. Today more than 6 lakhs
tractors of the company are toiling under the sun.
Not only in India, the tractors of the company are also being exported to a no. of
countries. Escorts has a wide range of tractors. The Head-Quartet of Escorts is in
Faridabad. The tractors of the Escorts Ltd. are known worldwide because of its quality product.
It has a wide range of tractors. It has three well accepted and
powerful brands Escorts, Powertrac & Farmtrac. All the three brands of Escorts
AMG have been designed in a manner that they complement each other in the
market place. The Escorts Institute of Farm Mechanization (EIFM) is located in
Bangalore (India). The main purpose of EIFM is to supply proper or needed
machinery in India for Farmers economics or wealth. This is known as Farm
Mechanization. Its purpose is to represent leadership of Escorts in agriculture arena
leveraging the knowledge, product & service of AMG.
Among all the agri Machinery companies Escorts become the first tractor
manufacturing company in the world to win the TS 16949 Certification for quality.
Contribution of Agri Machinery Group

Contribution of Agri Machinery

Forms of Ownership
In December 1959, Escorts agents ltd. was converted into a public limited company
and was renamed as Escorts Limited (EL). In January 1960, EL decided to set up
manufacturing facilities for making tractors in India under the Escorts brand name
in the 25-40 Horsepower categories.

Nature of Business
The Escort group is among Indias leading engineering conglomerates operating in
the high growth sector of Agri-machinery, Construction & material handling
equipments, Railway equipments and Auto components. Having pioneered farm
mechanization in the country. Escorts has played a pivotal role in the agriculture
growth of India for over Five decades and there Nature of business is Supplier,
Manufacturer, Service Provider
Geographic Area
With regional offices all over India in States of Haryana, Uttaranchal, Delhi &
Maharashtra
Tractors Manufactured by escorts Ltd. are sold not only in India but in other
countries also or over 41 countries of the GLOBAL MARKET, like
USA
CHILE
SENEGAL
TANZANIA
GHANA
SOUTH AFRICA
SRILANKA
POLAND

Chapter 3 Company Profile

3.1 Organization Structure
3.2 Vision & Mission
3.3 Products & Services offered
3.4 Distribution Network
3.5 SWOT Analysis
3.6 Competitor Information
3.7 Market share & growth rate
3.8 Key challenges
Vision and Mission

Through the power of Imagination in engineering we creates solution that

helps our customers, be more productive.
Mission of ESCORTS is:
Engineering Changes through core competency for greater synergy reinforcing
bonds with customers & establishing powerful symbiotic relationship with
international allies, preparing global market. The company wants to make a lasting
difference to its shareholders, its customers, its business associates, its employee and
the country as a whole. The company also gives better quality and better technology
to customer and treats every customer as special to build respect for, and loyalty
to, Escorts.

Product & Services by Agri-Machinery Group

Escorts is one of the largest tractors manufactures of the country. It is one of the
leading AMG & produces tractors in the 27-75 HP range. Its manufacturing capacity
is 1.2 lacs per annum & has already sold tractors more than 1 million.
Tractor:-
A tractor is a self operating machine which provides traction for itself & power to
operate tools and other agricultural & non agricultural equipments attached to it.
According to Oxford dictionary the word Tractor was first used in 1856 in England
as a synonym with engine. The term Tractor appeared in an 1880 U.S.A. patent for
track laying steam traction engine.
Traction:-
It is a Force in the direction of travel.
Developed by the traction medium (Soil) & is transferred to the traction
The engine developed power, at the end goes to the traction wheels which
makes it able or allows it to move the tractor with or without load.
The speed gets reduced, due to the slip that occurs during the movement of
wheels.
With increasing load the slippage also occurs.
Use of good tyre tread increases the traction.
By adding weight of case iron and water ballasting, the weight can be
increased for good traction.

Introduction of Tractors
Predates independence humans were used in place of Bullocks for showing &
agricultural activities. After that Humans were replaced by Bullocks. With the
passage of time the first Tractor with steam engine developed. In 1961 Escorts
started manufacturing tractors in collaboration with URSUS of Poland. After thatwith
modernization & large competition in the market several ranges of tractors
were developed to fulfill the needs of farmers.
WHY ESCORTS TRACTORS ARE BETTER CHOICE?
Escorts Tractors are considered as a better choice by the farmers they provide
quality assurance to the farmers. Escorts AMG worked on the or uses the world best
methodologies of BPR. Its different range of tractors has been developed from
proven reliable design. It is even upgraded to meet the demands or requirements of
the farmers for greater output & reliability. Escorts Tractors are also considered best
because they are designed keeping in mind the demand or requirements or needs of
the farmers for their welfare. Also Escorts got the award for its quality product.

PRODUCT RANGES

Escort Powertrac

A Tradition of Trust The super diesel Savers

Escort (A Tradition Of Trust) -

Economy Range 27-35 HP Category
This was the very first range of tractors introduced by Escorts. The Escort range of
tractors has a tradition of service & trust behind them as they give quality assurance.
They are the farmers friends.
Powertrac (The Super Diesel Savers)-
Value Range 34-55 HP
The Powertrac range of tractors is designed to give spectacular diesel economy i.e.,
a striking or very impressive performance.
They are biggest friends for farmers as they can be used during rising diesel costs.
This range of tractors are perfect for the entire Indian farming community & their
prosperity as it takes or needs or uses less diesel compared to its other previous
ranges.
Farmtrac (The World Champion)
Premium Range 34-75 HP
In tractor technology, the Farmtrac range is the ultimate icon having a no. of
features. This range provides a huge no. of features for scientific farming & other
applications. It is a machine packed with powerful features for providing maximum
efficiency.
The top line of the company arises from four main verticals, namely: - the agricultural machinery
segment, the material handling and construction equipment
segment, the railway equipment segment and the auto suspension and ancillary
products segment. The company also derives a minor source of income from its
stakes in various companies located in India and abroad. Examining the historical
22
performances of all these segments, it is quite clear that the agricultural machinery
segment is the major driver of revenue. Historically that segment has contributed
around 72% of the companys total sales (sales from FY11-FY12).
This division of Escorts commenced operations in 1964 with the manufacturing of
tractors being the key activity. Currently the manufacturing of tractors takes place in
their Faridabad plant which churns out on average, around 260 tractors a day, in two
shifts.
However this facility has a manufacturing capacity of 400 tractors a day, with that
level being reached only during peak periods.
The Escorts brand of tractors is immensely popular amongst the farming folk in the
country, particularly in the northern territory. This statement is best exemplified by
the fact that every third tractor in the country is an Escorts tractor. Principally
Escorts offers three tractor brands namely: - Powertrac, Farmtrac and the
eponymous Escort. The Powertrac brand is the utility and value-for-money tractors
that functions on horsepower ranging from 34 to 55. The Farmtrac brand is the
premium tractor that functions on horsepower ranging from 34 to 75 while the
Escort tractor brand is the economy tractor that has twin-cylinder engines with horse power
ranging from 25 to 35.Out of these three brands, the Farmtrac brand is the
most popular, accounting for 50% of the companys total sales. The Powertrac brand
is not far behind, accounting for 48% of total tractor sales while the Escort brand
only accounts for 2%.
In addition to India, the company exports tractors and other farm equipment to more
than 40 countries. Construction equipments serve as the second largest contributor
of Escorts sales, attributing for around 15% of the companys total turnover. As
part of this segment, the company manufactures and markets a diverse range of
construction and material handling equipment such as cranes, loaders, vibratory
rollers and forklifts. The company has managed to garner quite a reputation through
this segment as it is the worlds largest manufacturer of Pick-n- Carry cranes with
that item generating more than 60% of the companys construction equipment sales.
It also has a strong presence in the manufacturing of compactors which contributes
another 25% of the total construction equipment sales. The remaining part of the
companys bottom line arises from the equipment division, which is further divided
23
into the railway equipment division and the auto equipment division. Traditionally
both these segments havent contributed an awful lot to the companys total turnover
(approximately around 8% over the last three years). Escorts is one of the oldest
suppliers of high-tech equipment to the Indian railways, having commenced that
relationship in 1970. The products of the railway equipment division are also
exported to over 15 countries worldwide. As far as the auto equipment division is
concerned the company has quite a strong presence in the country with an
aftermarket of 300 dealers, 1000 retailers and 20000 workshops/garages.
The company is considered to be a pioneer in the manufacture of automotive shock
absorbers, having produced that product for two wheelers and four-wheelers since
1966. Its auto division too is quite efficient with a manufacturing capacity of
5000000 units per annum. The company also follows a well-balanced market mix of
its auto manufacturing parts, with 60% accounting for domestic sales while 40%
accounts for exports. The companys commitment to research and development is
best exemplified through the Escorts Institution of Farm Mechanization, a
research institution located in Bangalore, and set up with the objective of enhancing
the agricultural productivity and quality of life in rural India. Through this
institution, the company is constantly striving to develop farmer friendly and fuel
efficient products.
Ecorts Popular Tractor Models
Farmtrac 65EPI

Farmtrac Champion
Farmtrac 45
Farmtrac 70
Farmtrac 60
Farmtrac Hero

Services Offered

The company makes its every effort for continuously improving and for meeting the
ever -rising expectation of its customers at the lower cost. The company tries to
fulfill the need of its customer, both internal and external with the highest degree of
commitment thereby creating a quality organization geared to ensure total customer
satisfaction and the continuous health and prosperity of the business.

Custome r Orientation: To fulfill the requirement of the internal and external

customer of the company.

Process Orientation: To optimize and harmonize interrelated process rather than

individual function.

Preventive Behavior: To prevent the mistake to happy the customer

SWOT Analysis

STRENGTH WEAKNESS
Good contacts / successful High work pressure due to less
networking. Number of Workforce
Positive Attitude,Self Lack of work Experience
Discipline
The time duration could not
Good relationship with
provide sufficient opportunity to
customers
study every detail of Sales and
Successful marketing Distribution management of the
strategies company
Reputation for innovation
OPPORTUNITY THREAT
Golden time for experience Pull and down competition.
of Market. Competitors with better job
Strong Network. hunting skill.
Loyal customers Competitors have a similar
product
Competitors have launched a
new advertising campaign

Competitor Information
MARKET SHARE OF MAJOR PLAYERS
The market shares of the top four players in the Indian tractor industry did not
change much during 2009-10 in comparison with 2008-09. M&M remained the
market leader with around 41.1% market share, followed by TAFE with a market
share of around 22%, Escorts with around 12.1%, and International Tractors (ITL)
with around 8.9%.
M&M remains particularly strong in the southern region (50.4% market share
during 2009-10). However, L&T John Deere (LT-JD) was able to increase its
market share in the region by around 250 bps in 2009-10, mainly at the expense of
M&M and Escorts. In the western region too, LT-JD performed well in 2009-10,
increasing its market share by 190 bps, even as TAFE lost market share by around
90 bps there.
In the northern region, where M&M has been traditionally weak, the company
increased its market share by 140 bps during 2009-10, even as ITL and Escorts lost
market shares by around 90 bps and 60 bps respectively, there. In the eastern region,
M&M was able to raise its market share by around 140 bps in 2009-10 at the
expense of Escorts and TAFE.

Top 2 Competitors of Escort Agri-Machinery Group.

Mahindra & Mahindra (M&M)
Tafe
Mahindra & Mahindra
Mahindra & Mahindras Farm Equipment Sector (FES), a part of the U.S. $14.4
billion Mahindra Group, maintained its leadership position in the tractor industry in
FY 2011 - 2012. Domestic sales in FY2011-2012 stood at 221730 units, as against
201785 units during FY2010-2011, having registered a growth of 10%. Total tractor
sales (domestic + exports) in the financial year stood at 235452 units, as against
213653 units for the same period last year. Exports for financial year ended on
March 31, 2012 stood at 13722 units, having registered a growth of 16%.
For the month of March 2012, the total sales stood at 17405 units. Exports for the
month registered an impressive growth of 33% at 1485 units the farm equipment
division of Mahindra & Mahindra, builds and sources tractors that are sold
worldwide across six continents. In 2010, Mahindra became the number one selling
tractor in the world. Mahindra has a huge consumer base in India, China and
America and a growing base in Australia. The company builds more tractors in India
than any other manufacturer, and has the capacity to build 150,000 tractors a year. In
1963, M&M formed a joint venture with International Harvester to manufacture
tractors carrying the Mahindra nameplate for the Indian market. Armed with
engineering, tooling and manufacturing know-how gained from this relationship,
M&M developed its first tractor, the B-275. Mahindra Tractors with sales of nearly
85,000 units annually is one of the largest tractor companies in the world, and is
number one in sales in India - the largest tractor market in the world.

Tractors and Farm Equipment Limited (TAFE)

Tractors and Farm Equipment Limited (TAFE), a US $1.6 billion tractor major
incorporated in 1960 at Chennai, India, is the third largest tractor manufacturer in
the world and the second largest in India by volumes, with a 25% market share of
the Indian tractor industry and a sale of approximately 150,000 tractors (domestic
and international) annually. TAFE's partnership with AGCO Corporation and the
Massey Ferguson brand for 52 years is an outstanding example of TAFE's
commitment to its values of building long-term relationships with its stakeholders,
through fair and ethical business practices. In the Indian market, TAFE has earned
the trust of its customers through its wide range of products that are known for high
quality and low cost of operation, backed by over 1000 strong distribution network
that effectively supports its three tractor brands of Massey Ferguson, TAFE and
Eicher. TAFE exports tractors in partnership with AGCO and independently,
powering farms in over 82 countries including developed countries in Europe and
the Americas. Besides tractors, TAFE and its subsidiaries have diverse business
interests in areas such as farm machinery, diesel engines, batteries, transmission
components, panel instruments, engineering plastics and hydraulic pumps and
cylinders. From a small beginning with just one tractor model in 1961, TAFE today
is recognized as a high quality mass manufacturer with an extensive product range
to meet every farming need, innate engineering strengths, uncompromising focus on
quality and an immense fund of experiential knowledge gained through designing,
developing, manufacturing and supporting tractors that are synonymous to reliability
and ruggedness. TAFE's R&D facilities are centers of excellence, renowned for their
innovative design and engineering expertise, and have been recognized by the
Department of Scientific & Industrial Research, Ministry of Science and
Technology, Government of India. Extensive research and testing ensures that
TAFE's products and aggregates meet its exacting performance standards.
Growth Rate and Market Share
On July 2004 Escort s AMG (Agri Machinery Group) recorded a strong sales
growth of 113 per cent. The Indian tractor industry, which grew 50.6 per cent during
April-May 2004 helped Escorts garner over five per cent market share.
Escorts Limited has registered a 20.80% increase in sales in the first quarter of fiscal
2009-10 ending December 31, 2009 on September, 2010.
Trend towards high HP Tractors
The proportion of higher power (greater than 50 HP+) segment has shown increase in
total industry volume share by 380 bps from 12.6% in 2007-08 to 16.4% in 2009-2010
to 18.2% in 2011-12. The Compa nys Reve nue of Rs 3,942.8 crore in 2009-2010 as
against Rs 3,279.8 Crore in 2010-2011. The Tractors Volume Came down by 4.3 per
cent to 60,673 in 2009-10 from 63,420 in 2010-2011. Tractors volumes on Full Year at
5,311 in FY12 as that of 6,244 in FY11.
This shows that the liquidity of the company has improved, interest costs have fallen
substantially and the debt equity ratio is attractive. The company is consistently
enhancing shareholder value through growth initiatives, fiscal prudence and
innovative strategies. We are leveraging our ability to engineer technology to chart
growth path that spans a wider canvas of economic activity across agriculture and
infrastructure sector.

Market Share
Key Challenges
Although every effort has been made to collect the relevant information through
the sources available, still some relevant information could not be gathered.
Busy Schedule of Concerned Executives: The concerned executives were having
very busy schedule because of which they were unwilling to give appointment.
Time: The time duration could not provide sufficient opportunity to study every
detail of Sales and Distribution management of the company.
Unawareness: Executives were unaware of many terms related to study while
asking to them.
Confidential Information: As the company on account of confidential report has
not disclosed some figures. Moreover, in some cases separate accounts of division
are not separately maintained thereby, leading to restrictions in study