SUMMER TRAINING REPORT SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF POST GRADUATE DEGREE IN INTERNATIONAL

BUSINESS

“CONSUMER BUYING BEHAVIOUR AND MEASURING CUSTOMER SATISFACTION LEVEL”

SUBMITTED BY:AABHASH KIRANMBA-IB (2007-2009)

Roll No. : A1802009257

INDUSTRY GUIDE FACULTY GUIDEMR ASHOUTOSH SINGH Ms. RICHA GOEL AREA BUSINESS MANAGER

AMITY INTERNATIONAL BUSINESS SCHOOL, NOIDA AMITY UNIVERSITY – UTTAR PRADESH

TO WHOM IT MAY CONCERN

This is to certify that AABHASH KIRAN, a student of Amity International Business School, Noida, undertook a project on “CONSUMER BUYING BEHAVIOUR” at ESCORTS LIMITED (FARIDABAD)From 3/3/2010 to 10/7/2010.

Mr._AABHASH KIRAN has successfully completed the project under the guidance of Mr.ASHOUTOSH SINGH. She/He is a sincere and hard-working student with pleasant manners.

We wish all success in her/him future endeavours.

Signature with date(Name)(Designation)(Company Name)

CERTIFICATE OF ORIGIN

This is to certify that Mr.AABHASH KIRAN, a student of Post Graduate Degree in MBA-IB, Amity International Business School, Noida has worked in the ESCORTS LIMITED, under the able guidance and supervision of Mr.ASHOUTOSH SINGH, designation AREA BUSINESS MANAGER, Company ESCORTS LIMITED.The period for which he/ she was on training was for 10weeks, starting from 3/5/2010 to 10/7/2010. This Summer Internship report has the requisite standard for the partial fulfillment the Post Graduate Degree in International Business. To the best of our knowledge no part of this report has been reproduced from any other report and the contents are based on original research.

Signature Signature(Faculty Guide) (Student)

ACKNOWLEDGEMENT

I express my sincere gratitude to my industry guide Mr. ASHOUTOSH SINGH, AREA BUSINESS MANAGER, ESCORTS LIMITED, for his able guidance, continuous support and cooperation throughout my project, without which the present work would not have been possible.I would also like to thank the entire team of MARKETING (ESCORTS), for the constant support and help in the successful completion of my project.

Also, I am thankful to my faculty guide Prof. Ms. Richa Goel of my institute, for his/her continued guidance and invaluable encouragement.

Signature(Student)

TABLE OF CONTENTS

(Research Based)Chapter No. Subject Page No.

Ch.# 1.0 Executive Summary………………….6Ch.# 2.0 Research Methodology………………

1.1 Primary Objective(s)………….111.2 Research Design………………141.3 Sample Design………………..211.4 Scope of the Study…………….261.5 Limitations…………………….27

Ch.# 3.0 Critical Review of Literature……….. 28Ch.# 4.0 Company Profile …………………….37

4.1 Industry Profile………………..834.2 Pest Analysis…………………...1024.3 Swot Analysis………………….106

Ch.# 5.0 Data……………………………………5.1 Primary Data……………………1115.2 Secondary Data….……………..112

Ch.# 6.0 Data Analysis and Interpretation……..113Ch#7.0 Findings………………………………..121Ch.# 8.0 Recommendations……………………..123Ch.# 8.0 Bibliography………………………….125Ch.# 9.0 Annexure……………………………..

9.1 Questionnaire…………………126Ch.# 10.0 Case Study ..…....................................135Ch# 11.0 synopsis of the project…………………

EXECUTIVE SUMMARY :

The Escorts Group, is among India's leading engineering conglomerates operating in the high growth sectors of agri-machinery, construction & material handling equipment, railway equipment and auto components. Escorts has played a pivotal role in the agricultural growth of India for over five decades. One of the leading tractor manufacturers of the country, Escorts offers a comprehensive range of tractors, more than 45 variants starting from 25 to 80 HP. Escort, Farmtrac and Powertrac are the widely accepted and preferred brands of tractors from the house of Escorts.

The survey involved gathering wide information about the company, its products, customer satisfaction and impact of various competitive firms on the company.From the information collected, various aspects were identified where the company needs to focus

more to improve the efficiency of marketing team of Escorts Limited.The research was conducted through collection of primary and secondary data. Secondary data was collected through visiting various web sites, automobile magazines and other reliable sources. Primary data was collected through a well-framed questionnaire, of which later a detailed analysis was done using various statistical I.T. tools like MS Word and MS Excel. On the basis, of secondary data analysis and the extensive analysis of primary data, interpretations were drawn for the questions and conclusion is drawn. Certain suggestions are also drawn from the analysis to help Escorts Limited to increase their market share by giving customers higher level of satisfaction.

INTRODUCTION

Customer Satisfaction is the buzzword used by the business people for the success of organization in the present days. Due to the increases of heavy competition in every product –line it become difficult for the companies to retain the customers for longer time. So retain the customer for longer time the marketer has to do only one things i.e. customer satisfaction .If customer is fully satisfied by the product it not only rub the organization successfully but also fetch many benefits for the company. They are less process sensitive and they remain customer for a longer period. They buy addition products overtimes as the company introduce related produce related products or improved, so customer satisfactions is gaining a lot of importance in the present day. Every company is conducting survey on customer satisfaction level on

their products .To make the products up to the satisfaction level of customers.

This project is also done to know the customers satisfaction on the ESCORTS TRACTOR on behalf of ESCORTS LIMITED.(Agri Machinery Group) The impact of Agri machinery industry on the rest of the economy has been so pervasive and momentous that is characterized as a boon for the economy. It played a vital role in the field of agriculture to produce surplus food grains and make economy self-sufficient in food production. The decrease in the interest rate and easy available of tractor loans from 2 to 3 years, lot of tractor manufacturers company facing cut throat competition in the fields of technology and price, So to gain the market share it is important for the institutes to satisfy its customers and to retain the reputation and its image.

Customer Satisfaction Strategies Followed By Escorts Limited:

The different strategies followed by Escorts Limited consists of Customer relation management, strategy to providing better facility to the owner, and strategy to provide better after sales service to customer.

CUSTOMER RELATION MANAGEMENT:

CRM is a tool used to create positive word _of -mouth, to monitor customer experiences and general referrals. A series of CRM activities were implemented with regular direct communication, events and customer satisfaction surveys.

RESEARCH METHODOLOGY

OBJECTIVES OF THE RESEARCH STUDY

The study has been taken to analyze the customer satisfaction towards all variants of ESCORT Tractors in Haryana (Palwal & near by villages) with a special reference to the ESCORTS LIMITED(Agri Machinery Group), the other objectives are:

To gather information about customer satisfaction toward Escort tractor in the geographic region of Haryana.

To know the customer perception about features, low maintenance cost and looks of tractor.

To know the customer satisfaction about the comfort and the safety provided by ESCORTS.

To provide suggestions, in improving the customer satisfaction and the company sales and profitability.

To know the customer satisfaction towards the after sales service offered by ESCORTS LIMITED.

Comparison of Escorts Tractor with its competitors.

RESEARCH METHODOLOGY

A research process consists of stages or steps that guide the project from its conception through the final analysis, recommendations and ultimate action. The research process provides a systematic, planned approach to the research project and ensures all aspects of the research project are consistent with each other.Research studies evolve through a series of steps, each representing the answer to a key question.

INTRODUCTION

This chapter aims to understand the research methodology establishing a framework of evaluation and revaluation of primary and secondary research. The techniques and concepts used during the primary research in order to arrive at its findings, which are also dealt with and lead

to a logical deduction towards the analysis and results.

RESEARCH DESIGN

I propose to conduct a intensive secondary research to understand the full impact and implication of the industry, to review and critique the industry norms and reports, on which certain issues shall be selected, which I feel remain unanswered or liable to change, this shall be further taken up in the next stage of exploratory research. This stage shall help me to restrict and select only the important question and issue, which inhabit the growth in the industry.

The various tasks that I have undertaken in the research design process are:

Defining the information need.

Design the exploratory, descriptive and causal report.

RESEARCH PROCESS

The research process has four distinct yet interrelated steps for research analysis.It has logical and hierarchical ordering.Each step is viewed as separate process that includes a set of task, step and specific procedure. The steps undertaken are logical, objective, systematic, reliable, valid, impersonal and ongoing.

EXPLORATORY RESEARCH

The method I used for exploratory research waso Primary Datao Secondary Data

Primary Data

New data gathered to help solve the problem at hand. As compared to secondary data which is previously gathered data. An example is information gathered by questionnaire. Qualitative or quantitative data that are newly collected in the course of research, consists of original information that comes from people and includes information gathered from surveys, focus groups, independent observations and test results.

Data gathered by the researcher in the act of conducting research.This is contrasted to secondary data, which entails the data gathered by someone other than the researcher information that is obtained directly from first- hand sources by means of surveys, observation or experimentation.

SECONDARY DATA

Information that already exists somewhere, having been collected for another purpose. Sources include census reports, trade publications, and subscription services. There are two types of secondary data: internal and external secondary data. Information compiled inside or outside the organization for some purpose other than the current investigation Researching information, which has already been published? Market information compiled for purposes other than the current research effort; it can be internal data, such as existing sales-tracking information, or it can be research conducted by someone else, such as a market research company or the U.S. government.

Secondary source of data consists of books and websites

My proposal is to first to conduct a intensive secondary research to understand the full impact and implication of the industry, to review and critique the industry norms and reports, on which certain issues shall be selected, which I feel remain unanswered or liable to change, this shall be further taken up in the next stage of exploratory research.

DESCRIPTIVE RESEARCH

STEPS in descriptive research:Statement of the problem

Identification of information needed to solve the problem.

Selection or development of instruments for gathering the information.

Identification of target population and determination of sampling plan.

Design of procedure for information collection.

Collection of information.

Analysis of information.

Generalizations and / or predictions.

DATA COLLECTION

Data collection took place with the help of filling of questionnaires. The questionnaire method has come to the more widely used and economical means of

data collection. The common factor in all the varieties of the questionnaire method is the reliance on verbal responses to questions, written or oral. I found it essential to make sure the questionnaire was easy to read and understand to all spectrums of people in the sample. It was also important as researcher to respect the samples time and energy hence the questionnaire was designed in such a way, that its administration would not exceed 4-5 mins. These questionnaires were personally administered.The first hand information was collected by making the people fill the questionnaires. The primary data collected by directly interacting with the people. The data was collected by interacting with 200 respondents who filled the questionnaires and gave me the required necessary information. The respondents were farmers, businessmen etc. the required information was collected by directly interacting with these respondents.

DETERMINATION OF THE SAMPLE PLAN AND SAMPLE SIZE: TARGET POPULATION

It is a description of the characteristics of that group of people from whom a course is intended. It attempts to describe them as they are rather than as the describer would like them to be. Also called the audience the audience to be served by our project includes key demographic information (i.e.; age, sex etc.).The specific population intended as beneficiaries of a program. This will be either all or a subset of potential users, such as farmers, businessmen, rural residents, or the residents of a particular geographic area. A population to be reached through some action or intervention; may

refer to groups with specific demographic or geographic characteristics. The group of people you are trying to reach with a particular strategy or activity. The target population is the population I want to make conclude an ideal situation; the sampling frames to matches the target population. A specific resource set that is the object or target of investigation. The audience defined in age, background, ability, and preferences, among other things, for which a given course of instruction is intended.

SAMPLE SIZE

This involves figuring out how many samples one need.The numbers of samples you need are affected by the following factors:

Project goals.

How you plan to analyze your data.

How variable your data are or are likely to be.

How precisely you want to measure change or trend.

The number of years over which you want to detect a trend.

How many times a year you will sample each point.

How much money and manpower you have.

SAMPLE SIZE

I have targeted 200 people for the purpose of the research. The target population influences the sample size. The target population represents the Haryana regions. .The people were mainly farmers, landlords and businessmen. The details of our sample are explained in chapter named primary research where the divisionsare explained in demographics section.

ERRORS IN THE STUDY

There is interviewer bias in the questionnaire method. Open-ended questions can be biased bythe interviewer’s views or probing, as interviewers are guiding the respondent while thequestionnaire is being filled out. The attitudes the interviewer revels to the respondent during the interview can greatly affect their level of interest and willingness to answer openly. As interviewers , probing and clarifications maximize respondent understanding and yield completer answers.

QUESTIONNAIRE ERROR

The questionnaire designing has to careful so that only required data is concisely reveled and there is no redundant data generated. The questions have to be worded carefully so that the questions are not loaded and does not lead to a bias in the respondent mind.

RESPONDENT ERROR

The respondents selected to be interviewed were not always and willing to co operate also in most cases the respondents to not have knowledge, opinion, attitudes or facts required additionally.

SAMPLING ERROR

We have taken the sample size of 200, which cannot determine the buying behavior of the total population. The sample has been drawn from only from Palwal and near by places in Haryana.

RESEARCH DESIGN

Research design is a conceptual structure within which research was conducted. A research design is the detailed blueprint used to guide a research study towards its objective. It is a series of advanced decision taken together comprising a master plan or a model for conducting the research in consonance with the research objectives. Research design is needed because it facilitates the smooth sailing of the various research operations, there by making research as efficient as possible yielding maximum information with minimum effort, time and money.

Scope of the study :

This study is aimed at providing the success of Escort tractors as well as customer’s response and awareness of the brand, product and services of Escorts Limited.

The data has been analyzed and presented in a simple and precise way on the basis of which pertinent recommendations to the company to better the services, policies, strategies of the company.

Limitations of the study:

The scope of the study is limited to the respondents are selected from Palwal and near by places in Haryana.

The project is carried out for the period of 60 days.

Measurement of customer satisfaction is complex subjects, which uses non- objectives method, which is not reliable.

The sample unit was also 200.

However, Escorts limited ( tractor showrooms) are located in other places i.e. locally and even in the neighboring states. Only opinion of respondents of Palwal and near by places was considered for finding out of opinions of respondents.

CRITICAL REVIEW OF THE LITERATURE

‘Consumer buyer behavior refers to the buying behavior of final consumers – individuals and households who buy goods and services for personal consumption.’ (Philip Kotler)

‘To understand the buyer, and to create a customer out of him, through thisunderstanding, is the purpose of buyer behavior.’ (Ramaswamy and Namakumari)

It needs to be specified at the outset that there is no unified, tested and universally established theory of buyer behavior. What is available today, are certain ideas of buyer behavior.

FACTORS INFLUENCING BUYER BEHAVIOUR:

A number of factors influence buyer behavior. They can be grouped under three broadcategories.

1.Factors that are part of buyer as an individual.

2.Buyer’s social environment (group influence).

3.Information from a variety of sources.

1. Factors that are part of the Buyer as an individual

An individual’s religion and cultural background, his personality traits, self concept, his general endowments, his upbringing – in short, his overall bio data – play a crucial role in his conduct as a buyer/consumer. These factors can be grouped broadly into three categories:

i.Personal factors

ii.Cultural factors

iii.Psychological factor1. Personal Factors – Age, Education, Economic Position, Self concept.

An individual’s age, level of education, his occupation, overall economic position and lifestyle all influence his role as a buyer. They decide what products he will buy and consume. A person’s self concept and his concern about his about status also influence his buying decisions. In fact today people are very concerned about their image and status in society. It’s a direct outcome of their material prosperity. Status is announced through various symbols like dress, ornaments, possessions and general lifestyle. The desire for self expression and self advancement is closely linked with social status. For several people, status is a major motive force guiding and shaping their life. Their concept of status decides what material possessions they should have. Even if a product that constitutes a status symbol is beyond their immediate reach, their aspiration to

possess it will influence their decision making process.

ii. Cultural Factors – Religion, Language etc.

Every culture, every language and every religion group dictates its own unique patterns of social conduct. Within each religion, there may be several sects and sub sects; there may be orthodox groups and cosmopolitan groups. In dress, food habits or marriage – in almost all matters of individual life – religion and culture exercise an influence on the individual, though the intensity may vary from society to society. The do’s and don’ts listed out by religion and culture impacts the individual’s lifestyle and buying behavior.

iii. Psychological Factors – Beliefs, Attitudes, Motivation, Perception.

Just like the economic and social conditions, a man’s disposition too has a close bearing on his purchase decisions. Individuals coming under the same

economic and social groups can be vastly different when it comes to certain personal beliefs, faith and attitudes. One may be timid and plain, while another may be outgoing and aggressive. One may be traditional in the overall view of life, while another may be modern. One may be east innovative, while another may welcome anything new. In fact, the maximum variations are seen here and in the matter of analysis and assessment too, this area poses maximum problem to the marketer.

2. Buyer’s Social Environment (group influence)The buyer living in a society is influenced by it and is in turn influencing its course of development. He is a member of several organizations and groups, bothformal and informal. He belongs to a family, he works for a certain firm, he may be a member of a professional forum, he may belong to a particular political group, or a cultural body. There is constant interaction between the individual and the groups to which he belongs. And all these interactions leave some imprint on him, which influences him in his day today life and consequently, his buying behavior. There are two broad types of group influences:

Influence of intimate group.

Influence of the broad social class.

I. Influence of Intimate Group

Examples of intimate groups are family, friends, close colleagues and closely knit organizations. These groups exercise a strong influence on the lifestyles and the buying behavior of its members. Among these groups the most influential and primary groups are the family and peer groups. The peer groups are closely knit groups composed of individuals, who have a common social background and who normally belong to the same age group. The peer group has the greatest influence on the individual member as a stabilizer of styles and behavior patterns.In any intimate group, there is likely to be an informal group leader. Te group respects him and looks up to him. Though the leader may not directly influence every member in his day to day purchases, his judgment on men and matters, and facts and fashion is respected by the group; and his views and lifestyle influences their buying decisions. He is

normally the innovator in the group, who first tries new products and new ideas, and then, he becomes the propagator of those products and ideas. These opinion leaders or influencers play a key role in marketing. Marketers often try to reach these leaders first through advertisements and other means of communication. And if the leaders are convinced , their groups are likely to follow the suit.

2. Influence of the Broad Social Class

Structurally, the social class is a larger group than the intimate groups. The constitution of a social class is decided by the income, occupation, place or residence, etc. of the individual members. The members of a social class enjoy more or less the same status or prestige in the community. They share a common lifestyle and behavior pattern. And they normally select a product or brand that caters to their class norms. Often they even do their shopping in the same shopping are and patronize selected shops, which befit their class image. This does not mean that all the members of a given social class will buy the same products and the same

brands or conform to the same style, amounting to a sort of regimentation. Differential liking may exist among the members. But, in a buying situation in which objective standard are not available to guide them, they may conform to the ‘class norms’. Studies have shown that the extent of influence the social class has on its members will depend on the extent of attractiveness of the group holds out to them. The greater the attractiveness, the larger is the behavioral conformity.Study of group influence on the individual buying behavior will help the marketers to develop right strategies for different customer segments. It is not feasible for them to appeal to the fancies of every individual buyer. They can find ’commonalities’ or ‘pattern’ among specific groups of buyers and work on them.

iii. Information from various sources

The buyer today is exposed to a veritable flood of information, unleashed on him from different sources. These sources inform him about new products and services, improved versions of existing products, new uses for existing products and so on. The information sources that persuade people to try

a product include: advertising, samples and trials, display in shops and salesmen’s suggestions.Each of these sources provides some information to the buyer about the products. When the buyer sees an advertisement for a product, he is informed about the existence of the products. Later on, he may develop a positive or negative attitude towards the product or he may remain neutral. In any case, a piece of information about the product is made available to him and it has some influence on his buying behavior.The availability of the product in the shop itself acts as an information source to the buyer. The buyer may evince an interest in the product and may inquire about it. The product advertises itself.Often salesmen serve as a source of information to buyers. The salesmen may inform the prospects about a product, explain its advantages and may even suggest a trial purchase. In cases where a rapport has already been established between the buyer and the salesman, the latter’s suggestions are normally taken as reliable.

COMPANY PROFILE

The Escorts Group, is among India's leading engineering conglomerates operating in the high growth sectors of agri-machinery, construction & material handling equipment, railway equipment and auto components.Having pioneered farm mechanization in the country, Escorts has played a pivotal role in the agricultural growth of India for over five decades. One of the leading tractor manufacturers of the country, Escorts offers a comprehensive range of tractors, more than 45 variants starting from 25 to

80 HP. Escort, Farmtrac and Powertrac are the widely accepted and preferred brands of tractors from the house of Escorts.

A leading material handling and construction equipment manufacturer, we manufacture and market a diverse range of equipment like cranes, loaders, vibratory rollers and forklifts. Escorts today is the world's largest Pick 'n' Carry Hydraulic Mobile Crane manufacturer.

Escorts has been a major player in the railway equipment business in India for nearly five decades. Our product offering includes brakes, couplers, shock absorbers, rail fastening systems, composite brake blocks and vulcanized rubber parts.

In the auto components segment, Escorts is a leading manufacturer of auto suspension products including shock absorbers and telescopic front forks. Over the years, with continuous development and improvement in manufacturing technology and design, new reliable products have been introduced.

Throughout the evolution of Escorts, technology has always been its greatest ally for growth. In the over

six decades of our inception, Escorts has been much more than just being one of India's largest engineering companies. It has been a harbinger of new technology, a prime mover on the industrial front, at every stage introducing products and technologies that helped take the country forward in key growth areas. Over a million tractors and over 16,000 construction and material handling equipment that have rolled out from the facilities of Escorts, complemented by a highly satisfied customer base, are testimony to the manufacturing excellence of Escorts. Following the globally accepted best manufacturing practices with relentless focus on research and development, Escorts is today in the league of premier corporate entities in India.

Technological and business collaboration with world leaders over the years, Globally competitive indigenous engineering capabilities, over 1600 sales and service outlets and footprints in over 40 countries have been instrumental in making Escorts the Indian multinational. At a time when the world is looking at India as an outsourcing destination, Escorts is rightly placed to be the dependable outsourcing partner of world's leading engineering

corporations looking at outsourcing manufacture of engines, transmissions, gears, hydraulics, implements and attachments to tractors, and shock absorbers for heavy trailers. In today's Global Market Place, Escorts is fast on the path of an internal transformation, which will help it to be a key driver of manufacturing excellence in the global arena. For this we are going beyond just adhering to prevailing norms, we are setting our own standards and relentlessly pursuing them to achieve our desired benchmarks of excellence.

THE HISTORY OF ESCORTS

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. Over the years, Escorts has surged ahead and evolved into one of India's largest conglomerates. In this journey of six decades, Escorts has had the privilege of being associated with some of the world leaders in the engineering manufacturing space like Minneapolis Moline, Massey Ferguson, Goetze, Mahle, URSUS, CEKOP, Ford Motor Company, J C Bamford Excavators, Yamaha, Claas, Carraro, Lucky Goldstar, First Pacific Company, Hughes Communications, Jeumont Schneider, Dynapac . These valued relationships be it technological or marketing, are our highly cherished experiences treasures, which have helped us

inculcate best in class manufacturing practices and to emerge as a technologically independent world class engineering organization.

1944 - Launch of Escorts (Agents) Ltd.

1948 - Pioneered farm mechanization in the country by launching Escorts Agricultural Machines Limited, with a franchise from the U.S. based Minneapolis Moline, for marketing tractors, implements, engines & other farm equipment. Launch of Escorts (Agriculture and Machines) Ltd.

1949 - Franchise of Massey Ferguson tractors for northern India

1951 - Escorts established India’s first private Institute of Farm Mechanisation at Delhi.

1953 -Escorts (Agents) Ltd. and Escorts (Agriculture and Machines) Ltd. merged to form Escorts Agents Pvt. Ltd.

1954 - 1st industrial venture of Escorts to manufacture piston rings in collaboration with Goetze of Germany, in an era when joint ventures of

Indian firms with foreign companies were virtually unheard of.

1958 - Started importing Massey Ferguson tractors from Yugoslavia for marketing the same in India.

1959 - Collaboration with Mahle of Germany to manufacture pistons. Soon, Escorts became the largest producer of piston assemblies in India.

1960 - Set up of Escorts Limited

1961- Setting up of manufacturing base at Faridabad for manufacture of tractors in collaboration with URSUS of Poland and 50% indigenous components. Launch of Escort brand of tractors. Collaboration with CEKOP of Poland for manufacture of motorcycles and scooters. Escorts moves into high gear by nurturing the two wheeler culture. The first Rajdoot motorcycle rolls off the assembly line.

1969 - Escorts Tractors Limited was born. A technical and financial joint venture with the global giant Ford Motor Company, USA, to manufacture Ford tractors in India. The years ahead saw Escorts grow as the largest tractor manufacturer in India.

Escorts Institute of Farm Mechanisation (EIFM) established at Bangalore.

Escorts Employees Ancillaries Ltd. (EEAL), a unique venture in industrial democracy comes into being.

1971 - 1st February, the first tractor FORD 3000 rolled out of the factory.

Escorts diversifies and starts manufacturing construction equipment.

1974 - Crossing national boundaries, Escorts exports for the first time. After winning a global tender, 400 tractors were exported to Afghanistan, which was perhaps the world's largest ever airlift of tractors.

1976 - FORD 3600, an advancement in Farm Mechanisation launched. Trial production of in-plant manufacturing of engine parts (Block & Head).

1977 - Escorts enters the world of self-developed technology by setting up its first independent R&D Center. Escorts Scientific Research Centre marked its beginning at Faridabad by developing its own

Engines for E-27 and E-37. Due to constant technology absorption, indigenisation level touched 72% for FORD tractors. 2nd plant at Bangalore for manufacturing piston assemblies was set up.

1979 - Collaboration with JCB Excavators Ltd., UK for manufacture of excavators.

1980 - Foray into healthcare, Escorts Hospital and Research Center set up in Faridabad.

1983 - Escorts Tractors Limited (ETL) established a state-of-the-art research and development centre to spearhead newer breakthroughs in Farm Mechanisation and to maintain industry leadership. Line concept introduced for engine block machining. 11,000 ton floating dry-dock Escorts I launched.

1984 - JV Escorts - Yamaha to manufacture motorcycles

1984 - Signing of agreement with the Japanese bike giant Yamaha to manufacture motorcycles with Yamaha technology. Collaboration with Jeumont Schneider of France to manufacture EPABX systems Collaboration with Dynapac of Sweden to

manufacture vibratory road compactors

1985 - Escorts Tractors Limited (ETL) offered its first Bonus Issue (1:1).

1988 - Escorts Heart Institute and Research Centre (EHIRC), a world class cardiac care facility launched in New Delhi.

1989 - Joint Venture with Claas of Germany to manufacture harvester combines.

1990-91 - First Public Issue in February 1991, over-subscribed four times. Shares listed on Delhi and Bombay Stock Exchanges.

1993 - FORD 3620 tractor launched.

1996 - Disengagement of joint venture collaboration with New Holland and launch of FARMTRAC Tractor.

1997 - Joint Venture with Carraro of Italy for manufacturing and marketing of transmission and axles.

Joint Venture with First Pacific Company of Hong

Kong - Escotel Mobile Communications.

1998 - POWERTRAC series of tractors launched.

MoU was signed with Long Manufacturing Company, USA for setting up a Joint Venture in USA.

1999 - MoU for Joint Venture with a Polish Company POL-MOT was signed for assembly, manufacturing and marketing of Farm Machinery.

2004 - Divested Escotel Mobile Telecommunications to Idea Cellular

TS16949 certification for Agri Machinery Group.

2005 – Divested Escorts Heart Institute and Research Centre (EHIRC) to Fortis Healthcare.

2006 - Divested in Carraro India Ltd.

Set up new manufacturing facility in Rudrapur for manufacture of new range of railway equipment.

CORPORATE SOCIAL RESPONSIBILITY CHARTER

At Escorts Limited, we are committed to making a positive difference in the socio economic fabric of the rural communes where we operate in. Being in a position of advantage, we recognize our responsibility in fostering sustainable development in the rural communities. We strive to earn the respect and trust of our stakeholders, be it the employees who work for us, the customers who buy our products or the environment that we work in. In the last two decades, Escorts has made a concerted effort in making the benefit of progress reach the backward section of the community.

Employees

Escorts Limited is committed to providing a safe, secure, fair and stimulating work environment to its employees that empowers them to not only make a meaningful contribution to the organization’s performance but also helps in personal and professional growth of the employee. The company has implemented systems that promote safety at workplace and have contributed to reductions in lost time injury rates. Educative seminars are conducted on a regular basis for workers where they are exposed to various training and skill development programmes including Fire Fighting demonstration & training, safety seminars etc. to euip employees to work safely. We also provide effective rehabilitation programs for our employees. At Escorts, health awareness drives are a regular occurrence where workers are given counseling on personal hygiene, polio awareness, eye care and general health. We also organize health check up camps for our employees and their families. For children of our employees, we regularly organize career counseling sessions to help build their future.

BUSINESSES OF ESCORTS LIMITED

Agri Machinery.

Escorts Institute of Farm Mechanization.

Engineering Division.

Railway Equipment.

Auto Component.

Construction Equipment.

Agri Machinery

Background

In 1960, Escorts set up the strategic Agri Machinery Group (AMG) to venture into tractors.

In 1965, we rolled out our first batch of tractors under the brand name of Escort.

In 1969 a separate company, Escorts Tractors Ltd., was established with equity participation of Ford Motor Co., Basildon, UK for the manufacture of Ford agricultural tractors in India.

In the year 1996 Escorts Tractors Ltd. formally merged with the parent company, Escorts Ltd.

Since inception, we have manufactured over 1 million tractors.

Technologies

Escorts AMG has three recognized and well-accepted tractor brands, which are on distinct and separate technology platforms.

Farmtrac: World Class Premium tractors, with single reduction and epicyclic reduction transmissions from 34 to 75 HP.

Powertrac: Utility and Value-for-money tractors, offering straight-axle and hub-reduction tractors from 34 to 55 HP. India’s No.1 economy range – engineered to give spectacular diesel economy.

Escort: Economy tractors having hub-reduction transmission and twin-cylinder engines from 27 to 35 HP. Pioneering brand of tractors

introduced by Escorts with unbeatable advantages.

International Subsidiaries

Escorts AMG has one international subsidiary.

Farmtrac Tractors Europe Sp.z o.o.in Poland.

We now cater to 41 countries.

Functional Excellence

Manufacturing

Quality AssuranceMaterials Management

Sales & Marketing

Knowledge Management

Finance

Human Resources

Information Technology

Beyond manufacture, Escorts has made substantial investments towards the modernization of farm technology. The Escorts Institute of Farm Mechanization (EIFM) at Bangalore is a unique center where training is imparted in operation, maintenance and repair of farm machinery. It is among the few institutions of its kind in the world. Its programs are aimed at encouraging customers, dealers, engineers, mechanics as well as the field staff of Escorts, towards meeting its objective of enhancing agricultural productivity and improving quality of life in rural India.

Knowledge Management

The Escorts Agri-Machinery Group Knowledge Management Centre, set up in 1976, has a history of over twenty-nine years. It is spread over 100000 Sq M (23 acre) area. It is equipped with modern facilities set up with an investment of over US $ 7.5 million.

It designs the entire tractor, defined as engine,

transmission plus hydraulic systems and Vehicle design consisting of sheet metal (including styling) plus controls and accessories.

Virtual prototypes of components and aggregate assemblies are made and assembled on computer workstations using 3D technology. The performance is checked on computers using simulation techniques thus saving a lot of time for the end-user as well as lowering development costs. The KMC uses advanced 3D-modeling, analysis and simulation software for engines, transmissions and vehicles. Physical prototypes are then extensively tested for performance, durability and reliability.

The facilities include a high-technology engine laboratory featuring fully computerized test beds with online control, data acquisition and analysis. We can test engine emissions for meeting the Bharat TREM norms, US Environmental Protection Agency (EPA) norms and European (Euro) norms. Additional capabilities of the engine lab are engine performance, durability, reliability, tribology and fluid dynamics studies. An advanced vehicle testing laboratory includes fatigue testing, dynamometer testing for chassis and power-take-off, and smooth

as sell as torture test tracks. Other facilities include Noise Vibration and Harshness (NVH) Lab., Metrology Lab., and Materials Engineering Lab. Product styling is carried out in a computerized virtual environment, which is supported by a model-making shop for physical prototypes.

In addition to multi purpose tractors ranges, a variety of special-purpose tractors have been developed for industrial applications as also non-agricultural applications like Haulage, Airport, potato and vineyard cultivation.

Escorts Institute of Mechanization

The Escorts Institute of Farm Mechanization (EIFM), was established way back in 1969 at Bangalore to

expand the potential of our intellectual capital. Spread over 85 acres of fertile land, it is a scientifically planned training complex including training halls, model workshops, and residential cottages and hostels covering 14 acres of land with facilities including canteens, dining halls, indoor & outdoor recreational areas. Another 76 acres is dedicated to model and demonstration farming.

EIFM provides training to farmers, employees, dealers, salesmen, service in-charge, parts in-charge, mechanics, financial institutions, government nominees, and agricultural and engineering students. EIFM is equipped with modern teaching aids including multimedia, computer learning centre, training literature in several languages, technical films, slide shows, extensive library for archival materials on various farming techniques, automobiles, agricultural engineering and management.

Railway Equipment

Escorts are a leading manufacturer of critical railway components since the last 40 years. It is one of the oldest and most trusted partners of Indian Railways, the largest rail network in the world. Having played a significant role in the growth and modernization of Indian Railways, today it is a multi-product, multi-technology business at Escorts.

Broad Product Portfolio:

Shock Absorbers

Couplers

Brake systems

Brake Blocks

An ISO: 9001-20000 certified company, Escorts manufactures products as per international standards specified by UIC, AAR and Indian Railways.

The products are exported to over 15 countries worldwide.

For railway equipment, the initial source of technology has come from some of world leaders in the arena like:

Schaku of Germany for couplers

Knorr Bremse of Germany for air brakes

REXLOK Resilient Rail Fastening System , Suitable for all Rail Sizes and the same clip suits any Sleeper / Tie, Material

ICER of Spain for composite brake blocks

Vulcanite of Australia for vulcanised rubber parts

A state of the art manufacturing facility located at Faridabad, near New Delhi has facilities for advanced product development, design, testing and validation. The in-house Research & Development has played a critical role in bringing about a high level of customer satisfaction, reliability and safety - the key drivers of business.

Escorts’ engineering experts have trained over 8000 railway personnel of various countries. As Asia’s largest manufacturer of air brake systems, the conversion of vacuum brake stocks to air brakes and installation and commissioning of complete brake systems on new builds are also undertaken by Escorts.

Auto Component

The Engineering Division of Escorts Ltd. is the leading manufacturer of auto suspension products including shock absorbers, struts and telescopic front forks. Escorts was the pioneer in Automotive Shock Absorber manufacturing in India in 1966 in Technical Collaboration with Fichtel & Sachs, Germany. Over

the years the technology obtained from Fichtel & Sachs of Germany has been continuously upgraded and new reliable products have been introduced. Another step forward in this direction is a comprehensive technical collaboration with world leaders Kayaba of Japan. A strong in-house design and development infrastructure of the Division enables introduction of new applications as per specifications of customers.

Broad Product Portfolio

Shock Absorbers

Front Forks

McPherson Struts

Technical Collaboration

Fichtel & Sachs, Germany (1966 - 75)Kayaba, Japan (for Motorcycle Front Forks &

Shock Absorbers) since 1998

Quality Systems

Obtained TS:16949 in 2004 ( Earlier ISO-9001 )

Adopted KAYABA Quality Systems as a subset of TS:16949

Business Philosophy

Customer Satisfaction – QCD

Continuous Benchmarking with KAYABA, Japan

KAIZEN - For Quality & Productivity

Production Capacity Per Annum: 5 million (Shock Absorbers, Front Forks, McPherson Struts Markets

2 Wheelers & 3 Wheelers - OEMs and After MarketMUV / LCV / HCV - OEMs and After MarketPassenger Cars - After Market

Construction Equipment

Escorts manufacturers and markets a diverse range of construction and material handling equipment like cranes, loaders, vibratory rollers and forklifts. The company was a pioneer in introducing the concept of Pick 'n' Carry hydraulic mobile cranes in the 70s in India and continues to be the world's largest manufacturer of these cranes.A nationwide network of 16 Sales Offices, 50 dealership locations, over 300 company trained dealers’ service engineers, gives it the best market reach in India for the Sales & Service of material handling and construction equipment.

With over 30 years experience in Construction Equipment Industry, Escorts has a proven track record in :

Hydraulic Mobile Cranes

Loaders

Forklifts

Vibratory Compactors

Today, it not only continues to be the largest mobile crane manufacturer in the country, but also the largest Pick ‘n’ Carry Hydraulic Mobile Crane manufacturer in the world.While recording a rapid growth in Crane Industry we’ve also been able to steadily increase our presence in the field of Vibratory, Soil & Tandem Compactors. Escorts was the first to bring the concept of Vibratory Compactors in India in a big way, back in 80’s. Subsequently more models in Tandem Vibratory Compactors and heavy duty Soil Compactor range were added in technical collaboration with HAMM Germany. Recently, we’ve further strengthened the range with a 3T Shoulder Compactor. Today our range of compaction equipments is one of the most preferred in the

market, and is being viewed as the most efficient and effective compaction solutions available in the country.

Along with Cranes and Compactors, we also manufacture Frontend loaders with payload capacity of 700kgs. Suitable for narrow lanes and confined spaces, these loaders are compact in design and are ideal for garbage handling, handing of chemicals, sands, small chips, etc.

Escorts also offers other material handing solutions like Forklifts from Daewoo Doosan Infracore Ltd., Korea and Articulated boom cranes from Fassi, Italy. In LPG Forklift category, the company enjoys a market share in excess of 85%.

This single-minded pursuit of precision and customer satisfaction has made us the 3rd largest in terms of Construction Equipment Sales unit per annum.

BRANDS AND PRODUCTS

TRACTORS

Farmtrac

Powertrac

Escorts

Farmtrac:

Farmtrac brand are the most powerful premium range of tractors that give maximum productivity to the farmers.Premium range - Powerful premium brand, 35 - 75 HP range

Powertrac:

Powertrac brand of tractors are the most fuel-efficient tractors in their respective categories that offer excellent value for money and have helped the farmers improve their quality of life.

Value range – Value for money, Fuel efficient, 30 - 55 HP range.

Escorts

Escort brand of tractors are symbolic of reliability and trust and enjoy the confidence of the farming community for the last 40 years.Economy range - 2 cylinder, 27 - 35 HP, Symbol of reliability since 40 years.

ENGINES

Excellent in Performance

Designed for 100% continuous operation and longer service intervals

Highly fuel efficient / Low operating cost

Class A1 governing with 4% regulation for stable operation in fluctuating load condition

Low Noise and VibrationCompact size

Cooling system designed for extreme weather conditions

Equipped with Pusher type fan for better cooling in Stationary application

Meets CPCB Emission norms

Fitted with Coolant expansion bottle - Does not require frequent topping up

Easy and Low maintenance

Quick start

Plateau honed wet liners for longer life and low oil consumption and better service ability

3 ring pack version Piston with ring carrier for top ring for

Longer life

Low friction & Higher fuel efficient

Chrome Plated top piston ring for longer life & low lub oil consumption

Valve stem seal for lower lub oil consumption

Water pump with integral bearings and unitized seal for longer leakage free life of Pump

Low cost of spares

LUBRICANTS

A key initiative of Escorts Ltd. in our continuous endeavor to provide TotalCustomer Satisfaction.

Genuine Engine and Gear oils for the complete range of Escorts tractors developed to suit varying temperatures and climatic conditions.

Every drop of SURAKSHA embodies the excellence that Escorts has gained over 50 years experience in tractor manufacturing and reflects its keen understanding of the Indian farmer and his tractor.

"SURAKSHA" - the protective shield for the tractor - tailor made for enduring performance year after year.

Escorts Construction Equipment Limited

The range of material handling and construction equipment products are manufactured and marketed under the brand ECEL (Escorts Construction Equipment Limited). ECEL has earned market leadership through constant innovations of product technology and features. ECEL has come to

be synonymous with Strength, Reliability and Sophistication.

RAILWAY EQUIPMENT

An ISO: 9001-20000 certified company, Escorts manufactures railway equipment as per

international standards specified by UIC, AAR and Indian Railways.Asia’s largest manufacturer of air brake systems, the conversion of vacuum brake stocks to air brakes and installation and commissioning of complete brake systems on new builds are also undertaken by Escorts.

Diverse product range:

Shock Absorbers (Oil Dampers) for coaches, locomotives, EMUs, MEMUs, DMUs, Metro and Rail Cars

Air brakes for coaches, Freight cars, DMU and OHE Cars

Automatic/Semi Permanent Couplers for EMUs, DEMUs, MEMUs

Electro Pneumatic Brake Systems for EMUs and MEMUs

Composition brake blocks for coaches, locomotives, freight cars and EMUs

Rail fastening systems for wooden, steel and concrete sleepers

Direct Admission Valves for vacuum braked coaches

Testing equipment for brake systems and shock absorbers

Air brake accessories for passenger coaches, freight cars, locomotives and self propelled vehicles

Metal to rubber bonded vulcanized components

Automatic twist locks for container freight cars

AUTO COMPONENT

Escorts’ leadership in auto suspension products in India comes through continuous improvement in manufacturing technology and expansion of product range to cater to OEMs of all vehicle categories, including passenger cars, commercial vehicles, multi-utility vehicles, motorcycles, scooters and mopeds.

CORPORATE FACTS

Escorts Limited, the flagship company of The Escorts Group is a leading manufacturer and supplier of Agri Machinery Products, Auto Suspension and Ancillary Products and Railway Equipment.

Registered Office SCO-232, First Floor Sector-20, Panchkula-134109 Haryana

Corporate Centre15/5 Mathura Road, Faridabad – 121 003Phone: 0129 – 2250222Fax: 0129 – 2250058, 225006Board of Directors

Mr. Rajan Nanda, ChairmanMr. Nikhil Nanda, Joint Managing Director Dr. P S Pritam, DirectorDr. M G K Menon, DirectorDr. S A Dave, DirectorMr. S C Bhargava, Director

Compliance OfficerMr. G B Mathur Executive Vice PresidentLaw and Company Secretary

Statutory AuditorsM/s S N Dhawan & Co.Member Firm of Mazars Worldwid

Internal AuditorsM/s Grant Thornton

Financial Year1st October to 30th September

Listing on Stock Exchanges The Company's shares are listed at :

1.The National Stock Exchange of India Ltd., Trade World, Senapati Bapat Marg, Lower Parel, Mumbai - 400 013.

2.The Stock Exchange, Mumbai, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001

3.Delhi Stock Exchange Association Ltd. DSE House, 3/1, Asaf Ali Road, New Delhi - 110 002

INDUSTRY PROFILE

As commercialization of agriculture grew in intensity in the mid to late 1800s the British Raj and the local legislatures and provinces began investing in agricultural development through support and establishment agricultural research farms and colleges and large scale irrigation schemes yet the level of mechanization was low at the time of independence in 1947. The socialist oriented five year plans of the 1950s and 60s aggressively promoted rural mechanization via joint ventures and tie-ups between local industrialists and international tractor manufacturers. Despite this aggressiveness the first three decades after independence local production of 4-wheel tractors grew slowly. Yet, by the late 1980s tractor production was nearly 140,000 units per year and by the late 1990s with production approaching 270,000 per year, India over-took the United States as the world's largest producer of four-wheel tractors with over 16 national and 4 multi-national corporations producing tractors today. Despite these impressive numbers FAO statistics estimate that of total agricultural area in India, less than 50% is under mechanized land preparation, indicating large opportunities still exist for agricultural mechanization.

HISTORY

1945 to 1960War surplus tractors and bulldozers were imported for land reclamation and cultivation in mid 1940's. In 1947 central and state tractor organizations were set up to develop and promote the supply and use of tractors in agriculture and up to 1960, the demand was met entirely through imports. There were 8,500 tractors in use in 1951, 20,000 in 1955 and 37,000 by 1960.

1961 to 1970Local production began in 1961 with five manufacturers producing a total of 880 units per year. By 1965 this had increased to over 5000 units per year and the total in use had risen to over 52,000. By 1970 annual production had exceeded 20,000 units with over 146,000 units working in the country.

1971 to 1980Six new manufacturers were established during this period although three companies (Kirloskar Tractors,

Harsha Tractors and Pittie Tractors) did not survive. Escorts Ltd. began local manufacture of Ford tractors in 1971 in collaboration with Ford, UK and total production climbed steadily to 33,000 in 1975 reaching 71,000 by 1980. Credit facilities for farmers continued to improve and the tractor market expanded rapidly with the total in use passing the half million mark by 1980.

1981 to 1990A further five manufacturers began production during this period but only one of these survived in the increasingly competitive market place. Annual production exceeded 75,000 units by 1985 and reached 140,000 in 1990 when the total in use was about 1.2 million. Then India - a net importer up to the mid-seventies - became an exporter in the 1980s mainly to countries in Africa.

1991 to 1997Since 1992, it has not been necessary to obtain an industrial license for tractor manufacture in India. By 1997 annual production exceeded 255,000 units and the national tractor population had passed the two

million mark. India now emerged as one of the world leaders in wheeled tractor production.

1997 to 1999Five new manufacturers have started production since 1997. In 1998 Bajaj Tempo, already well established in the motor industry, began tractor production in Pune. In April of the same year New Holland Tractor (India) Ltd launched production of 70 hp tractors with matching equipment. The company is making a $US 75 million initial investment in a state of the art plant at Greater Noida in Uttar Pradesh state with an initial capacity of 35000 units per year. Larsen and Toubro have established a joint venture with John Deere, USA for the manufacture of 35-65 hp tractors at a plant in Pune, Maharashtra and Greeves Ltd will produce Same tractors under similar arrangements with Same Deutz-Fahr of Italy. Looking to South American export markets Mahindra and Mahindra are also developing a joint venture with Case for tractors in the 60-200 hp range. Total annual production was forecast to reach 300,000 during the following year.

1999 to Present

Facing market saturation in the traditional markets of the north west (Punjab, Haryana, eastern Uttar Pradesh) tractors sales began a slow and slight decline. By 2002 sales went below 200,000. Manufacturers scrambled to push into eastern and southern India markets in an attempt to reverse the decline, and began exploring the potential for overseas markets. Sales remained in a slump, and added to the market saturation problems also came increased problems of "prestige" loan defaults, where farmers who were not financially able took tractors in moves to increase their family’s prestige. There is also reported increased misuse of these loans for buying either lifestyle goods, or for social functions. Government and private banks have both tightened their lending for this sector adding to the industry and farmers woes. By 2004 a slight up tick in sales once again due to stronger and national and to some extent international markets. But by 2006 sales once again were down to 216,000 and now in 2007-08 have slid further to just over 200,000.

MANUFACTURERS OF TRACTOR

Balwan Tractors, Force Motors Ltd

Formerly known as Bajaj Tempo Ltd. until 2005, Force Motors Ltd., makers of India's ubiquitous 3-wheeler Tempos since 1957 in a collaboration with Vidal & Sohn Tempo Werke, Germany.

In 1999 began production of Ox and Ox 45 Brand Tractors both which incorporated transmission technology from the German manufacturer ZF. Additional line Balwan was introduced in 2004 and between the lines Force Motors offers a line of two-wheel and four-wheel tractors in a horsepower range from 10 - 50 HP.

Captain Tractors Pvt. Ltd

Founded in May 1994 and located in Rajkot, India, Captain Tractors manufactures mini-tractors under the Captain brand.

Eicher

In 1949, Eicher GoodEarth, was set up in India with technical collaboration with Gebr. Eicher a of Germany, imported and sold about 1500 tractors in India. In April 24, 1959 Eicher came out with the first locally assembled tractor from its Faridabad factory and in a period from 1965-1974 became the first fully manufactured (100% indigenization) tractor in India. In December, 1987 Eicher Tractors went public and in June, 2005 Eicher Motors Limited sold Eicher

Tractors & Engines to a subsidiary of TAFE called TAFE Motors and Tractors Limited.Eicher also produced tractors under the Euro Power and Eicher Valtra brands under license from Valtra, an AGCO brand.

Escorts (Escort, Powertrac and Farmtrac)

Escorts Ltd began local manufacture of Ford tractors in 1971 in collaboration with Ford, UK and total production climbed steadily to 33,000 in 1975 reaching 71,000 by 1980. Ford (Ford - New Holland) was sold in 1992. Ford Motor Company proper quit the tractors business, but the name was allowed to continue as per agreement until 2000, when Escorts relabeled its Ford models under the Escort brand. Escort manufactures produces tractors in the 27-75 HP range and has already sold over 6 lac tractors. Its tractors are marketed under three brand names, Escort, Powertrac and Farmtrac.

HMT Tractors

HMT is a large public sector unit and began manufacturing Agricultural Tractors in 1972 under the HMT brand name with technology acquired from Zetor of the Czech Republic. It manufactures its tractors in Pinjore, Mohali in a large factory that also manufactures machine-tools, and Hyderabad It has a capacity of 20,000 tractors per annum. In the Machine-tool company is a large foundry. It produces tractors in a range from 25 HP to 75 HP. For a short time, HMT exported tractors to the USA under the Zebra brand, which were marketed by Zetor distributors and dealers there. The company is controlled by the Ministry of Heavy industry that provides, on a monthly basis to the public its financial performance.

Mahindra & Mahindra

M&M's Farm Equipment Sector origins lie in a joint venture in 1963 between the Company, International Harvester Inc., and Voltas Limited, and was named International Tractor Company of India (ITCI). In 1977, ITCI merged with M&M and became its Tractor Division. After M&M's organizational restructuring in 1994, this

division was called the Farm Equipment Sector. The Farm Equipment Sector has also ventured into manufacturing of Industrial Engines. M&M Industrial engines are used for various applications like generator sets, industrial, construction, marine, compressors, etc. These engines are manufactured at the Company's engine assembly plants at Kandivli and Nagpur. M&M has two main tractor manufacturing plants located at Mumbai and Nagpur in Maharashtra. Apart from these two main manufacturing units, the Farm Equipment Sector has satellite plants located at Rudrapur in Uttarachal and Jaipur in Rajasthan. The Farm Equipment Sector as reported by the Company has a dealer network of over 450 dealers. This dealer network is managed by 28 area offices, situated in all the major cities and covering all the principal states and M&M tractors has sold more than 13,00,000 tractors since its inception. M&M's Farm Equipment Sector is perhaps the largest exporter of Indian tractors to the USA and the west. And in a reversal to earlier trends of Indian tractor manufactures with joint ventures with western tractor companies, M&M, in2004 announced that they had bought majority stake (80%) in Jiangling Tractor Company, and renamed it Mahindra Jiangling Motor Co Group

(JMCG). This is the first instance of Indian tractor industries participating in India's reverse FDI. The plant in China reportedly has a production capacity of 12,000 tractors annually.In March 2007, M&M bought a controlling 43% stake in the Mohali-based tractor firm Punjab Tractors (Swaraj) that will reportedly increase M&M's share in the domestic farm equipment market from just over 30% to 40%. The 43% stake includes 29% owned by private equity firm Actis Capital and 14.2% by the Delhi-based Burman family. In July 2007, Mahindra upped its stake to 64.6%

New Holland

New Holland Ag's entry into India was facilitated by FIAT's acquisition of Ford-New Holland in 1991. By 1998 New Holland Ag. (India) completed the construction of a new plant in Noida, near New Delhi, with a capacity of 5000 tractors in the 35 - 75 hp range. In 1999, New Holland Ag.'s parent company FIAT bought 70% of holdings of Case Corporation and created Case New Holland Global (CNH one of the top three tractor/agricultural/construction machinery

manufacturers in the world), the new holding company New Holland Ag. (India). In 2000, the capacity of the Noida plant rose to 12,000 tractors per year and in 2007 the company manufactured 24,000 tractors for the domestic and export markets.New Holland India exports fully-built tractors to 51 countries in Africa, Australia, South-East Asia, West Asia, North America and Latin America.The India plant of New Holland was originally built in 1998 to cater only to India domestic market. However due to slow down of economy by year 2001-2002 and slump in domestic demand, it became a challenge to utilize the installed capacity of the factory.Hence the company started looking its market beyond India borders. Its then CEO Mario Gasparri guided the vision and handed over the task of overseas business to its dynamic manager Bhanu Sharma. The efforts paid off well. Bhanu Sharma in capacity of Head-International Business Operations, took op the export volumes from the level of almost nil in 2003 to 8000 units in year 2007. The export business last year in 2007 contributed over 50% of the company business of total USD 250 millions.This also made New Holland the second largest tractor exporter from India after John Deer. In year 2007, India

exported around 32,000 tractors of which 25% share was of New Holland.

Punjab Tractors Ltd (Swaraj Tractors)

In 1965, Government of India research institute Central Mechanical Engineering Research Institute, Durgapur, WB initiated design and development of Swaraj Tractor based on indigenous know-how. In 1970, Punjab Government acquired the Swaraj tractor's design and established Punjab Tractors Limited (PTL). It was India's first large-scale totally indigenous project. The company exports Tractors to various countries including USA. It manufactures nine models of tractor and several models of combine harvesters. The manufacturing units are located at Mohali District, Asron Village of Nawanshahar District and Nabha of Patiala District, Punjab. Today swaraj tractor in no 2 brand in indian after Mahindra tractor.More than 800000 lacs tractor sold.The popular models sold under SWARAJ brand are:

SWARAJ 744, SWARAJ 735, SWARAJ 855, SWARAJ 978, SWARAJ 834, SWARAJ 939, SWARAJ 733, SWARAJ 724, SWARAJ 722Swaraj also manufactures Forklifts and Combines, which are assembled in their Mohali Plant.Actis Capital, a private equity firm acquired 29% of Punjab Tractors in mid-2003 from the Punjab Government. In March 2007, and currently subject to the receipt of requisite approvals, M&M bought a controlling 43% stake in Punjab Tractors Ltd. that will reportedly increase M&M's share in the domestic tractor market from just over 30% to nearly 40%. The 43% stake in Punjab Tractors includes the 29% owned by Actis Capital and 14.2% by the Delhi-based Burman family. In July 2007, Mahindra upped its share in Punjab to 64.6%.

Sonalika (International Tractors Ltd.)

International Tractors Limited was incorporated on October 17, 1995 and began manufacturing tractors designed by Central Mechanical Engineering Research Institute (CMERI). ITL currently is manufacturing Sonalika tractors between 30 HP to 90 HP, and the CERES brand between 60HP to

90HP. ITL went into collaboration with Renault Agricultural of France in July 2000. Renault Agriculture is a subsidiary of the Renault Group. Renault Agriculture was bought by CLAAS of Germany in 2003. Incidentally CLAAS already has a strong presence in India market producing its Crop Tiger range of Combine Harvesters in a plant in Faridabad (near New Delhi) since 1992.

KEY PLAYERS IN THE INDUSTRY

Building on the success that it reaped in the light-truck segment, TATA Motors introduced apassenger vehicle version of its one-toner - “Ace”. The new Multi Purpose Vehicle (MPV) ispositioned against Maruti’s “Omni” and has been aggressively priced so as to open up thecompetition in that domain. The Omni is priced between Rs. 2.3 lakh and Rs. 2.5 lakh (ex-showroom Mumbai).“TATA Motors is following almost the same strategy that it used with Indica - launchingmultiple variants built-up on the same platform. The platform being used for “Ace” is versatileand it is exploring innovations on that platform”, confirmed a source close to TATA Motors.The source also indicated that the launch, of the same, was strategically slated for a year beforeTATA Motors’ much-hyped people’s car gets on to the roads. The new MPV will target thesame market segments, semi-urban and rural, where the Rs. 1 lakh car is expected to make a biguproar. The Ace will be used to test the potential of the market and the distribution network of

TATA Motors’ in these specific regions. A spokesperson was also found to say: “At any givenpoint in time TATA Motors is working on various innovations. We cannot comment anyfurther.”Also spotting the potential in the MPV segment is - Bajaj Auto, which is also working on similarlines, to attain faster-than-industry-average growth, BAL has identified MPVs as a potentialgrowth segment. Bajaj Auto’s managing director Rajiv Bajaj had said, “The middle ground(between two and four-wheelers) can spawn a range of ‘lite’ vehicles — a diet version if you will— and that’s something we will look at. We are intending to get into a family of ‘lite’ fourwheelers, both for people and goods. We will get into that business first with a goods carrier.”Another possible player in the same segment could be “Hero”, which also plans to foray into thefour-wheeler segment. Hero Honda MD Pawan Kant Munjal said that – “The group would get into four-wheelers as a natural extension of its bike business”, but he declined to specify whetherit would be passenger cars, light commercial vehicles or other passenger vehicles.

Maruti’s Omni, presently, the only player in the MPV segment, has sold around 65,350 units inthe April-January period, depicting an astounding growth of 27 percent. This pips the 21 to 22percent growth in the overall passenger car segment. The Omni is popularly viewed as a peoplemover in small towns and as a freight vehicle in cities. Maruti has also introduced some cheaper,fuel-efficient versions of Omni that run on “Environment-friendly” gases - LPG and CNG,considerably reducing the operational and maintenance costs to the consumer.The success of “Ace” opened up a whole new segment in the market of commercial vehicles andhas led to other players like Bajaj Auto, Ashok Leyland and M&M queuing up to acquire achunk of the ultra-light truck market.

PEST ANALYSIS

A PEST analysis is concerned with the environmental influences on a business. The acronym stands for

Political

Economic

Social

Technological

Political Factors:

The major risk associated with the Tractor Industry continue to be dependence on monsoon andavailability of finance from the Banks. The second monsoon was lower than the normal in morethan half of the areas across India leading to reduced Rabi sowing by 3% in comparison to last year. However, this is likely to be compensated by more productivity and better realization of theproduce in the coming months. Credit flow to the

agricultural sector has been slow thananticipated because of the settlement of the debt waiver cases by the Banks and the release offresh loans to the farmers. Govt. has directed the PSU Banks to increase their lending to achievethe enhanced target of financing fixed for the agricultural sector. The continued slow down ofdemand in the American and European countries may have ripple effect on export of tractors andrealization of proceeds from these countries.

ECONOMIC FACTORS:

The Company continues to focus on its Agri Business. However, it has changed its focus fromthe high volume, low profit products to high margin products to create a niche in the higher HPModels. At the same time, the Company is pursuing Value Engineering in the low margintractors to improve its margin and re-launch the same. AMG has constituted a Forward PlanningGroup within the Company to envisage its strategy and vision for the next 5 years. YourCompany has an appropriate internal control system for business processes with regard to efficiencies of

operations, financial reporting and compliance with applicable laws and regulations etc. Your Company has appointed Grant Thornton International as our Internal Auditors which works under the directions of an Audit Committee constituted as per the guidelines. The Internal Audit Reports are reviewed by the senior management and placed before the Audit Committee of the Board of Directors.

SOCIO- CULTURAL FACTORS:

The Company, in its endeavor, to serve community continued to contribute in the various activities around the Units. The Company, during the year, organized Eyes/Health Check up Camps, Blood Donation Camps, sponsored Sports activities at the District and State level in the State of Haryana. It carried out the Career Counseling Session for the children of the employees of Escorts. The Company has a Scholarship Scheme for the deserving children of the Employees of Escorts and gives scholarships. The Company has spent Rs. 68 lakhs on the same during the year.

TECHNOLOGICAL FACTORS:

To keep pace with competition and advances in technology, Escorts Knowledge ManagementCenter (KMC) established in 1976 is a world class R&D with facilities for design and productevaluation to deliver quality and trouble-free products. The entire tractor system, from the engineto transmission and hydraulic systems as also vehicle design from body work to controls and accessories is developed at the KMC. We are the first Indian company with in-house R&D capabilities to certify engines for US EPA and EURO-VCA. The quest for technological excellence is further proven through the modern R&D centre and Quality and Testing laboratories set up at various plants of our Engineering Division deploying latest servo-hydraulic testing systems (MTS) and cam drum rigs for durability and life tests.

SWOT ANALYSIS

SRENGTH:

Escorts Limited has proven through its performance in fiscal 2007-08 that the efforts tostrengthen the fundamentals of the company, sharpen focus on core strengths, build value forcustomers and drive operational efficiencies have put the company on a profitable track. Of themany initiatives that were undertaken, the biggest contributor has certainly been the initiatives inrevamping the economics of the business by focusing on cost compression. A slew of initiatives has resulted in a saving of over Rs. 100 crore by eliminating waste, working more

efficiently, right-sizing the work force, reduction of held stock and negotiating better prices from our suppliers. Company engineering strength built over several decades gives us this competitive advantage to continuously develop new products, advance our processes and develop customer friendly solutions.

WEAKNESS:

Diversified Products on the list and the concentration each product receives

decreases accordingly.

Huge customer base has made the online service slow.

High reliance on imported raw material imports creating potential price / Quality

available issues.

Realization per metre is still lower than competition.

Flexibility in the organization.

OPPURTUNITIES

There is data available in case of registered motor vehicles, but for carts and bicycles, there is no published information. Also, no reliable source of information is available regarding vehicle penetration into rural areas. A few studies have been found to indicate the following:

50% of the villages have the population less than 500.

60% villages do not have acess to AWRs.

Smaller the village, lesser the economic activity, and therefore, lesser the number of vehicles.

Carts ferry only about 15 percent of the tonne-km of goods whereas trucks carry about 83percent. India is highly under-motorized. The penetration levels of cars, two-wheelers, buses and other commercial vehicles stand at 7, 45, 0.7 and 4 per thousand persons, respectively. These levels of penetration only signify an even lesser extent of the same in rural areas. Railways, good roads and reasonably taxed vehicles, all together, would enable the transport of goods between rural production bases and urban centers of consumption. It definitely is not

a question of either but is one that has to consider both. Public transport needs to be enhanced and taxes need to be reduced. Taxes add to about 50percent of the vehicle cost, in India. Export schemes have been withdrawn, Multi-Utility Vehicles (MUVs) are taxed at a uniform rate of 16 percent and some other cars at 24 percent.

THREATS

World Bank has projected world output to grow by a mere 0.9% in 2009 compared to 2.5% in2008 and a high of 4% in 2006. Growth in the developing countries as a whole is expected to fall from 6.3% in 2008 to 4.5% in 2009, only to recover to 6.1% in 2010. This is mainly due to China and India. India, being largely domestic dependent economy, is expected to show a growth of 6% to 7% during 2008-09 and 2009-10. Major effect of the decline in growth is coming in the manufacturing sector and

the services sector. It is expected that the decline in these sectors will be compensated by high growth in the agricultural sector.

DATA

PRIMARY DATA

In order to find out customer satisfaction & Perception regarding the Escort tractors. Primary Data was collected by personally visiting the dealerships and showrooms. With the help of a questionnaire we took the survey in various villages in Palwal district of Haryana. As well as we contacted some of the customers through tele calling by taking the data about the customers from the customer data register of the dealership. We

interviewed them and discussed with the dealers as well as with the employees at Escorts which helped us to prepare our research Report.

SECONDARY DATA

The Secondary Data collection involved internet search, browsing magazines, newspapers and articles and papers related to the Escort industry in India. Numerous Journals and books related to the topic were also browsed to understand the dynamics of the industry.

DATA ANALYSIS AND INTERPRETATION

Source: Questionnaire

Table No.1 Satisfaction towards Escorts Tractor

SATISFIED DISSATISFIED70% 30%.

Interpretation 1

The sample drawn on probability basis shows that 70% of the customers are satisfied with Escort tractor and only 30% are dissatisfied.

ObservationMost of the respondents approached were satisfied with the tractor.

Table no.2 Factors affecting customer satisfaction towards Escort tractor.

Factor No of respondents

Percentage%

Features 24 12Low maintenance

80 40

Comfort 23 11.5

Style 20 10After sales service

53 26.5

Interpretation 2

The sample drawn on the probability basis clearly shows that 40% (80respondents) are of the opinion that low maintenance cost is the satisfaction factor

for Escort tractor and 26.5%(53 respondents) of them view After sales service as a vital factor for customer satisfaction. Followed by features which corresponds to 12%(24 respondents), comport with 11.5%(23 respondents) and only 10% (20 respondents) of them view that style of Escort tractor as satisfaction factor.

Observation:

Majority of the respondents are of the idea that low maintenance of the top most feature contributing to customer satisfaction followed by after sales service, features, comfort and style.

Table no.3 Customer opinion towards fuel consumption.

Factor Percentage%Extremely satisfied 27%Satisfied 49%Neutral 17%Dissatisfied 7%

Total 100%

Interpretation 3: 100% of the respondents, 49% of the respondents approached were satisfied with the fuel consumption. Followed by 27% was extremely satisfied, 17% are neutral and rest of the 7% is more dissatisfied with fuel consumption of Escort tractor.

Observation: as majority of the respondents are satisfied with the fuel consumption of Escort tractor, the company should maintain the standard and it is suggested to come up with suitable measure to reduce the negative opinion among the consumer who are of the opinion that the fuel consumption is a dissatisfying factor.

Table no.4 Customer opinion toward safety and comfort.

Factor Percentage%Extremely satisfied 23%Satisfied 47%Dissatisfied 20%Neutral 10%

Total 100%

Interpretation 4: 100% of the respondents, 47% of the respondents approached were satisfiedwith the safety and comfort feature of the Escort. Followed by 27% was extremely satisfied,17% are neutral and rest of the 7% was dissatisfied with safety and comfort feature of Escort.

Observation: As majority of the respondents are satisfied with the safety and comfort feature ofEscort tractor, the company should maintain the same standard and it is suggested to come up with suitable measure to reduce the negative opinion among the consumer who are of the opinion that the fuel consumption is a dissatisfying factor.

Table No.5 Customer opinions towards design.

Factor Percentage%Extremely satisfied 20%Satisfied 40%Neutral 27%Dissatisfied 13%Total 100%

INTERPRETATION 5: 100% of the respondents, 40% of the respondents approached were satisfied with the design of Escort tractor. 20% were more satisfied, 27% of them neutral and 13% are dissatisfied with the design of Escort tractor.

Observation: As majority of the respondents are satisfied with the design of Escort tractor the company should maintain the same standard and it is suggested to come up with suitable measure to reduce the negative opinion among the consumer who are of the opinion that the fuel consumption is a dissatisfying factor.

Table No.6:Customer satisfaction toward Maintenance of Escort tractor.

Factor Percentage%Extremely satisfied 23%Satisfied 51%Neutral 21%Dissatisfied 5%Total 100

Interpretation:The sample drawn on the probability basis shows that out of 100% ofRespondents, 51% of the respondents approached were satisfied with the maintenance of thetractor. 23% were extremely satisfied, 21% of neutral and 5% are dissatisfied with themaintenance.

Observation: Though majority of the customers are satisfied that the maintenance cost of Escort tractor is less, around 21% are are not satisfied which is due to the newly launched tractor by Mahindra with low maintenance cost.

Table No.7: Customer perception about the performance of the Escort Tractor:

Very god Good Average Bad Very bad20% 47% 21% 12% _

Interpretation 7: The sample drawn on the probability basis shows that out of 100% respondents. 47% respondents gave good response with the performance of the tractor, 20% gave very good responses, 21% gave average response and 12% gave bad response.

Observation : As 67% of the respondents are happy with the performance of the tractor, it satisfies that the customer satisfaction levels are very high.

FINDINGS

Based on the data gathered by administrating schedules to customers the following observationsare made.

ESCORTS LIMITED has excellent percentage of customer satisfaction according to the data shown in the table 1 of the data analysis and interpretation topic.

Most of the people are satisfied with its low maintenance cost and after sales service provided by Escorts.

Based on the fuel consumption, most of the people are satisfied with it.

Based on the safety, comfort, design, maintenance most of the people are satisfied with it.

Overall people are satisfied with the performance of the Escort tractor.

RECOMMENDATIONS

Escorts Limited has to implement good customer relationship management strategy that enhances customer satisfaction level.

The company can go for the undertake R&D to improve the existing feature which field help increase the customer satisfaction.

The company should promote about the entire feature offered by it.

As majority of the customer give opinion that they are satisfied is the factor, services and design of the product of the company should take not only maintain the existing standard but also enhance them.

BIBLIOGRAPHY

WWW.ESCORTSGROUP.COM

WWW.ESCORTSAGRI.COM

WWW.GOOGLE.COM

WWW.AUTOMOBILE.COM

PHILIP KOTLER 12TH EDITION MARKETING MANAGEMENT

DATA FROM ESCORT DEALER FROM PALWAL IN HARYANA.

ANNEXURES

Annexure 1

QUESSTIONAIRE

Customer Profilea) Name b) Occupation

c) Age d) Income

e) Address

1) Are you satisfied with Escort tractor?

a) Yesb) No

2) If ‘yes’ Which factor you consider is satisfies you most?

a) featureb) low maintenancec) looksd) after sales service

3) Are you satisfied with the fuel consumption of tractor?

a) Extremely satisfiedb) Satisfiedc) Neutrald) Dissatisfied

4) Are you satisfied with the safety and comfort of Escort tractor? a) Extremely satisfied

b) Satisfied

c) Neutrald) Dissatisfied

5) Are you satisfied with the design?

a) Extremely satisfiedb) Satisfiedc) Neutrald) Dissatisfied

6) Are you satisfied with maintenance cost? a) Extremely satisfied

b) Satisfiedc) Neutrald) Dissatisfied

7) Are you satisfied with the power steering?

a) Extremely satisfiedb) Satisfiedc) Neutrald) Dissatisfied

8) Your general perception about Escort tractor?

a) Very goodb) Goodc) Averaged) Bad

9) Are you satisfied with the after sales service of Escorts?

a) Extremely satisfiedb) Satisfiedc) Neutrald) Dissatisfied

10) Do you want to give any suggestion about any change in the tractor?

Annexure 2

MODELS OF TRACTOR

FT HERO PT 434

FT CHAMPION ESCORT 335 JOSHImplements and Trailors

Spring Tyne Tiller 12 Disc offset Disc

Rotory Tillers Rectangular Bailer

CASE STUDY ON ESCORTS LIMITED

THEME

Joint ventures strategic alliances.

ISSUES

» Why Escorts pulled out of the joint venture and how this move is going to affect Yamaha Motors.

» Escorts’ new business initiatives and how the company is placed to succeed in new economy businesses.

The Escorts - Yamaha Motors Break-Up

INTRODUCTION

On April 24, 2000, at the board meeting of Escorts Limited (Escorts), members seemed to know precisely what to expect.

Just five days earlier, Rajan Nanda (Nanda), Chairman of Escorts, the flagship of the Rs 35 billion Escorts group, had been to Japan to hold talks with the Yamaha Motor Company (Yamaha Motors) officials- Escorts' equal partner in the Indian motorcycle venture, Escorts Yamaha Motor Ltd (EYML). Before leaving, he had left instructions that a board meeting should be convened on April 24. An important announcement was to be made. At the meeting, Nanda informed the directors that, subject

to the board's approval, Yamaha Motors could be given a majority stake in the joint venture company. The Japanese two-wheeler major had offered to buy an additional 24% stake in EYML from Escorts at Rs 200 per share. The deal would add Rs 2.3 billion to Escorts' coffers.

The announcement seemed to have been well accepted by the board, as there was not even a murmur of protest. For the Escorts board, such announcements were not new. In a little over a year, Escorts had offloaded substantial chunks of its equity in three joint ventures to its overseas partners. It all started in 1999 when Escorts sold one-third of its shares in the construction equipment company Escorts JCB to JCB of the United Kingdom for Rs 490 billion. This brought its stake down from 60% to 40%. Next came the turn of Hughes Escorts Communication, a 51:49 joint venture between Hughes Communications of the United States and Escorts. In December 1999, Escorts offloaded 23% of its stake to Hughes for Rs 750 million. This brought its shareholding in the company to 26%. This was the second such exercise undertaken by Nanda since 1995 when he took over the reins of the company from his father, Har Prashad Nanda as chairman of

the group. At that time, he had identified six areas of growth for Escorts-agri-business, construction equipment, two-wheelers, auto-components, telecom and finance.

And each business was spun off into a separate company, leaving Escorts, the flagship, to focus on agri-business. Nanda then identified four thrust areas for Escorts-agri-business, telecom, software and healthcare. The idea behind giving Yamaha Motors the majority stake in the joint venture was to focus more on the four thrust areas.

Two Wheeler Industry in India

The 3.8 million two-wheeler market in India included scooters, motorcycles and mopeds. In the late 1990s, the domestic two-wheeler industry had undergone many structural changes. Motorcycles consistently gained market share from the scooter and the moped. The trend was expected to continue in 2001-02. 150cc vehicles from Bajaj Auto and LML dominated the scooter market. Northern India was the major market accounting for nearly 46% of the total scooter sales. The Indian motorcycle market could be broadly categorized into Indian motorcycles and Indo-Japanese motorcycles. The Hero group, Bajaj and Escorts dominated the Indo-Japanese motorcycle segment in collaboration with Japanese vehicle manufacturers Honda, Kawasaki and Yamaha respectively.

In 2000, the market for motorcycles was segmented into three categories based on price: the premium segment (45,000 and above); the mid segment (Rs 40,001-45,000); and the entry segment. (upto Rs 40,000) In the premium

segment, the competition was between TVS Suzuki, Hero Honda and Escorts Yahama Motors. In the mid segment, Hero Honda was the clear leader with 35% share. In the entry segment, Bajaj Auto was the choice of many for segment wise sales & market share). Yamaha Motors was a major competitor in the premium segment, but after the break up with Escorts in May 2001, there was no sign of rejuvenation. The Indian market favoured four-stroke vehicles. This posed a problem for Yamaha Motors, whose strength was two stroke vehicles. TVS-Suzuki was not very aggressive as far as new launches were concerned. Between 1992, when the Samurai was launched, and 2000 when the Fiero was launched, the company had nothing really new to offer..

Escorts, Yamaha Tie the Knot

In 1985, Yamaha Motors entered into a technical support agreement with Escorts, and started local production of Yamaha motorcycles. In 1995, Yamaha and Escorts signed another contract, establishing EYML to manufacture and market motorcycles in India. Each company invested 50% of the capital for the original venture . EYML produced a wide range

of motorcycles for the urban and rural markets at its Faridabad (Haryana) and Surajpur (Uttar Pradesh) plants. The joint venture manufactured Rajdoot motorcycles at Faridabad and the RX and four-stroke YBX series at Surajpur...

BOOM PHASE

In 1996, Escorts transferred its motorcycle manufacturing facility at Faridabad to the joint venture. Anil Nanda, chairman, EYML, said the Surajpur and Faridabad facilities would be modernized and upgraded with a Rs 3.75 billion budget. EYML would turn out upgraded versions of the current high performance bike, RX 100, and RXG 135 to meet stringent emission norms. In 1997, a further upgraded RXZ 135, a sleeker version would be launched and the 4 stroke YBX 125 would be launched in February 1998 to meet the growing demand for fuel-efficient bikes. YBX 125 would deliver the best of both worlds-performance along with fuel efficiency. EYML also planned to launch 2-3 product variants every year...

DECLINE PHASE

In April 2000, Escorts announced that it was likely to sell around 20% stake in EYML to Yamaha Motors. Escorts would thus become a minority shareholder in EYML. However, an official said that Escorts' holding in the joint venture would not be less than 26% and it would not exit from the joint venture. Said Nanda, "I have no intentions of selling off the entire stake to Yamaha. Escorts will retain the 26 per cent stake we now hold in the venture." In late April

2000, the board of Escorts approved the proposal to divest 24% equity. With the change in the equity pattern, Yamaha Motors would control the management of the joint venture. Commented Nanda, "We have always believed that business relationships are driven by the value added by each partner...

THE END

In May 2001, Yamaha Motors struck a deal with Escorts for acquiring the latter's 26% shareholding in YMEL for Rs 700 million. The deal marked Escort's exit from the joint venture. Yamaha Motors would now hold 100% stake in the company. Commenting on Escorts' exit from the joint venture, an official said, "We would like to get out of businesses where we are not in the driver's seat and in the case of Yamaha technology it was not a part of our expertise." He said Escorts would now concentrate on agri-business, telecom and healthcare...

The Road AheadEscorts' exit from the joint venture seemed to be a well-planned move. The group had already moved out of businesses where it believed it did not have a sustainable advantage. On August 22, 2000 at the group's Annual General Meeting, Nanda announced that Escorts would now focus on the new economy. He said, "To continuously create value, we have strategically moved our investments from low-growth areas to high growth avenues, or in other words, shifted our focus to businesses, which have a potential for higher growth and profitability..."

AMITY UNIVERSITY-----UTTAR PRADESH-----

 

Amity International Business SchoolSUMMER INTERNSHIP EVALUATION

 Student Name AABHASH KIRANEnrollment No A1802009257Programme MBA – IBCompany's Name and Address

ESCORTS LIMITED18/4, FIRST PLANT ESCORTS LIMITED FARIDABAD ,HARYANA

Industry GuideName Mr. ASHOUTOSH SINGHDesignation AREA BUSINESS MANGER Contact Number  Ph.(O) :                 (R) :  Mobile : 09958800323                Fax :                  E-mail : ashoutosh.singh@escorts.co.in      

Project Information1) Project Duration : (68Days)                   a)  Date of Summer Internship commencement (03/05/2010)                   a)  Date of Summer Internship Completion (10/07/2010)2) Topic "CONSUMER BUYING BEHAVIOUR AND MEASURING CUSTOMER SATISFACTION” 3) Project Objective The objective of the research is to find out the customer satisfaction of the clients towards the escorts tractotrs in haryana and to know the after sales service of escorts tractors and measure their satisfaction level. 4) Methodology to be adopted Research Design - The non probability respondents have been researched by selecting the respondents who are trading through online. Research is primarily both Exploratory & Descriptive in nature. The sources of information are both primary and secondary data.

1) Exploratory research objective is to gain insights and ideas. 2) Descriptive research objective is typically concerned with determining the frequency with which something occurs. 5) Brief Summery of project(to be duly certified by the industry guide) The conclusion of the research is that The survey involved gathering wide information about the company, its products, customersatisfaction and impact of various competitive firms on the company.From the information collected, various aspects were identified where the company needs tofocus more to improve the efficiency of marketing team of Escorts Limited.The research was conducted through collection of primary and secondary data. Secondary data was collected through visiting various web sites, automobile magazines and other reliable sources. Primary data was collected through a well-framed questionnaire, of which later a detailed analysis was done using various statistical I.T. tools like MS Word and MS Excel. On the basis, of secondary data analysis and the extensive analysis of primary data, interpretations were drawn for the questions and conclusion is drawn. Certain suggestions are also drawn from the analysis to help Escorts Limited to increase their market share by giving customers higher level of satisfaction.    Signature(Student)

Signature(Industry Guide)

Signature(Faculty Guide)