India represents one of the Japanese multinational’s biggest opportunities where it is “aiming for high business CAGR”.
Today, the group holds just over 10% market share today, leaving what it sees as substantial room to grow.
“Expanding our business in India, the world’s largest and growing tractor market, is itself our growth strategy, and we will further invest Kubota’s resources in development, procurement, manufacturing, and sales to elevate our business in the country,” said Shingo Hanada, president and CEO of Kubota.
The company acquired a majority stake in India’s Escorts Group and merged operations to become Escorts Kubota Limited.
However, its first years were marked by a difficult post‑merger integration (PMI) and the company admits that this has slowed progress in India.
“It has been about three years since the acquisition. During the first two years after the acquisition, we recognise and reflect that there were significant challenges in PMI. What I mean by that is that it was not easy to align Kubota’s way of thinking and operating with that of the Indian side. Integration was difficult, and further improvement beyond that integration was also challenging,” said Hanada.
He elaborated that there has been deeper involvement from the Japanese side of the business. Over the past year, it undertook a comprehensive review of quality systems, manufacturing processes, the dealer network and cost structure of Escorts Kubota.
“In that sense, while we may have lost one to two years in the beginning, we now believe that the foundation has been established, the key issues have been clearly identified, and execution is about to begin,” said Hanada.
He also hinted at a series of targeted improvement projects that are now in motion.
The company has started to see positive signs with the launch of the Promaxx tractor model last year
Hanada said that the model, which incorporated Japanese-driven process upgrades and tighter quality checks, has been well received in the market, helping the company recapture market share.
After this success, it will be extending these improvements across its wider portfolio
“Until now, Kubota’s resources were used mainly for Kubota branded products. We have now begun allocating resources more actively to the two local brands, Farmtrac and Powertrac, in order to accelerate overall improvement,” said Hanada.
“Based on this progress, we are confident that over the next five years we can achieve significant market share expansion and improvement in profitability.”
Asia importance
While North America remains its central focus, Kubota was also keeping a close eye on Asia.
Hanada highlighted the importance of markers like Thaialnd, where the company has the largest share in the region and continues to deliver stable performance.
The firm does not expect dramatic market expansion in Asia overall, it sees opportunities to grow the category, particularly through products aimed at upland farming.
“Profitability in the region is very high, and it remains an extremely important business for us,” said Hanada.
Despite not being labelled a “growth driver” or business in need of rebuilding, Asia remains one of Kubota’s strongest contributors to profitability, said Hanada.
“We continue to view it as a very important business. From the standpoint of profit margin and profitability, other Southeast Asian countries are also still highly important.”
