The company is hoping to begin its Chinese operations by March 2005 and it is set to open a sales and marketing office in Australia by November 2004.
"We have not yet firmed up plans whether we will set up our assembly unit in China or sign up with a local partner and use its unit," an M&M executive said. M&M will export completely knocked down kits from its Kandivli plant for the assembly operations.
The Chinese tractor market is about 4-5 times the size of the Indian market. Since the average farm holding in China is also larger, the market is dominated by higher powered 40-50 bhp tractors.
Industry sources said M&M would make its China foray with a local partner as breaking into the Chinese market required local knowledge. The Chinese tractor market is also highly competitive and populated with a number of large and marginal players. The Chinese government taxes its farm equipment manufacturers less.
Ahead of M&M, another Indian company, Escorts, has shown interest in the Chinese market. It is in the process of identifying a joint venture partner there.
M&M operates two assembly units in Georgia and sells around 5,000 tractors in the US. It began its European operations this year by shipping its first consignment of tractors to Spain. M&M's tractor exports, made largely to the US, fell around 17 per cent in 2003-04.