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Off Road Survey & Understanding

the Indian Tractor Market


Presented by:

Adam Banks, Snr. Marketing Specialist

Agenda
Tractors are amazing!
Global Trends in Off Road Equipment
The Indian Market
Gaining Traction: Understanding Tractor Users in India
What we have found and what were going to do

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Driveline by application
ATF

Step-type Automatic Transmission fluids (ATFs)


Double Clutch Transmission fluids (DCTFs)
Continuously Variable Transmission fluids (CVTFs)

Gear
Rear Axle fluids
Manual Transmission fluids

Off Road
Super Tractor Oil Universal (STOUs)
Universal Tractor Transmission Oil (UTTOs)
TO-4 Fluid

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Supporting our Driveline growth


Over the last 3 years, weve invested!
Doubled our OEM Team
CTS increased from 7 to 12, now
including local support in India R
R&D Team expanded
Ever-growing testing capability

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Tractors are amazing!

The Longest Indian Expedition on a Tractor


One tractor, 19 days, 7050 km, September 2013

Jaibir Singh Virk and Amit Chaudhary drove a tractor (Indo Farm 75 HP) from Chandigarh
to Kanyakumari
14 states and 28 cities (including Delhi, Gwalior, Banglore, Madurai, Udupi , Panjim, Surat,
Pune Udaipur and Bikaner) through hills, deserts, curvy roads and tight plains
Highlights:
Officially the Longest Indian Expedition on a Tractor in the Limca Book of Records
Driving for 10 hours at a stretch but they had air-con!
Bribing cops
Eating in dhabas; the masala dosa that was served on banana leaves in Tamil Nadu
The experience of different cultures
Their cause: 'Indo Farm's Great Indian Tractor Journey for Peace linked to World Peace day

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The Longest Indian Expedition on a Tractor


One tractor, 19 days, 7050 km, September 2013

The Indo Farm 75 tractor is already well-known having


appeared in recent blockbuster Chennai Express
This is not Virks first record

He holds the longest ever non-stop reverse drive by covering


273 km in a tractor in reverse gear in 14 hours and 45 minutes

"We drove for about 278 hours, and took a


break only four times for about 4-5 hours in
all in those 19 days. 400 km a day, around
18 hours every day to complete the journey
on time. As the tractor cannot be driven
beyond 25 km per hour, it becomes
tedious.

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All Shapes and Sizes


Mining Trucks
Excavators
Tractors

Motor Graders
Pipelayers
Compactors

Skid steer loaders


????????
Harvesters
Loaders
Tracked tractors

Telehandlers

Back-Hoe loaders

CAT and the Caterpillar logo are registered trademarks of Caterpillar Corporation. Other photography obtained through Wikimedia Commons and used with permission under the terms of the GNU Free Documentation License .,Pipelayer and tractor courtesy of btr under CCbySA license

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Tractor Oil is amazing!


Universal Oils have to cover all of the following
Industries
Agriculture (arable,
livestock, mixed,
paddy field)
Construction
(general, heavy)
Forestry
Groundscare /
municipal
Vineyards
Mining & quarrying
(open cast,
underground)
Waste management
Materials handling
Road building
Demolition
Heavy industry

Applications
Transmissions
Axles
Front axles
Differentials
Final drives
Hydraulics
Wet Brakes
Steering brakes &
clutches
Power Take-Off
Torque converters
Steering systems
Engine

Machines
Farm tractors
Harvesters
Telehandlers
Back hoes
Loaders
Excavators
Haul Trucks
Compactors
Dozers
Implements (balers,
seed drills etc)

Typical Claims
Low brake noise
Smooth clutches
Gear protection
OEM coverage
Low temperature
performance
Corrosion protection
Seal compatibility /
leak reduction
Oxidation claims
AW for pump
protection

One fluid is expected to serve a massive range of;


components, machines and industries

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Lubricant Applications

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Global Trends in
Off Road Equipment

Drivers of Continued Industry Change

Globalization
of OEMs,
Suppliers, &
Others

Energy
Efficiency

Emission
Mandates

Comfort and
Productivity

KEY GLOBAL TRENDS

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Global Market Share - Construction


(Quoted in Ploughing Ahead)

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Global Equipment Market Share


Zoomlion

Caterpillar

Other

John Deere
Mahindra
Same Deutz Fahr
Terex
Sany
Hyundai
Kubota

Komatsu

Hitachi

JCB
Liebherr

XCMG
Doosan AGCO

CNH

Volvo CE

Global mobile Off Road equipment market (by value 2010, total US$180bn)
Source: Afton compiled from OEM annual reports

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Chinese OEMs Global Expansion

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Chinese OEM consolidation


XUGONG LOADERS
XUZHOU HEAVY DUTY MACHINERY 1989
XUZHOU CONSTRUCTION MACHINERY

XCMG

1997

ARVIN MERITOR

XUZHOU MERITOR AXLE

SANY HEAVY DUTY

SANY GROUP 2012

1989HUNAN SANY GROUP1994

PUTZMEISTER
SANY MATERIAL

HUNAN MACHINE TOOL

CIFA (No. 3) 2008

2002

ZOOMLION

1992 ZHONGLIAN CONSTRUCTION MACHINERY

BRITAIN POWERMOLE

2001

PUYUAN

2003

CG KEBELCO CRANE
2010

CHENGGONG CONSTRUCTION MACHINERY


CG KEBELCO CM 1994

CG KEBELCO OR

2003

YANGZHOU MACHINERY 2003


JIANGYIN TRANSPORT

CUMMINS JV 2011

2000

LIUZHOU CM

LIUGONG GROUP
LIUGONG ZF 1995

SHANGHAI FORK LIFT2002

XIAMEN CONSTRUCTION MACHINERY WORKS

HSW
XGMA

WUHAN CHUTIAN
SHANDONG DOZER GENERAL WORKS
1993

KOMATSU

2012

1995

2008

SHANYUI

KOMATSU SHANTUI JV
KOMATSU

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Bigger and Smaller


More power demanded

but compact equipment very popular

India average tractor


~40hp

Increasing New Tractor Average Horsepower


Source: AEA and Farmers Weekly 2008

Power and torque

vs

Power Density

Very different demands on the lubricants EP vs Oxidation

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Bigger and Smaller

and emissions limits impose restrictions

Indias Bharat Trem regulations match these


(but over the last ten years, not 25!!)

European emissions regulations, based on 125hp


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Whats next for Off-Road Drivelines?

Fendt Trisix Concept Tractor


Image courtesy AGCO Your Agriculture Company

Efficiency is the key driver for future off-road equipment: fuel efficiency,
production efficiency, labour efficiency, and life cycle operating costs.
The winners will be the OEMs that help their customers be the most productive
at the least cost within the constraints of the government mandates.

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Driveline Solutions
Objectives

More power to ground


Lower engine revs
More constant engine running at optimum power band
Reduced losses better fuel economy
Higher productivity & Comfort
Better integration to other systems and tools
Greater component durability (lower running & warranty costs)
Longer drain intervals (2000-4000hrs)

Strategies

Evolving design
More gear ratios
Energy recovery
Electrification?

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Driveline Solutions
Existing, established technologies
Manual
Hydrostatic
Powershift (planetary)
Automated Manual

Newer and emerging technology


CVT different types
Hybrid
Energy recovery
Electric Drive
+ various others

No ONE best solution. Variety of applications means success for each type.
Eye-popping figures like 40% fuel economy and 30% productivity gains quoted

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CVT
Wholly unlike passenger car CVT (limited torque)
Powersplit, combining two systems in parallel
Provides efficiency of mechanical link with
continuous ratios of hydrostatic.
Greater comfort.
Different OEMs implementing in different ways
In agri, used to control speed. In construction,
used to control torque.
In wide use in Agriculture excellent for
ploughing, drilling etc
Starting to emerge in construction
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Electric Drive
Diesel motor linked to generator
Electric drive motors
In current use in big haul trucks
Many OEM prototypes / early models
Cummins offering a dedicated system
Barriers to implementation include

Generator

Infrastructure (agricultural implements)


Compelling reason to change
Proof of technology

Motor
Engine

John Deere E-premium a half-way-house

Generator on driveshaft to power implements


Improved efficiency and precision claims
Provides a bridge to implement-OEMs
ZF Terra+ transaxle inclduing a generator
(50-70 kW) also moves in this direction
PTO-mounted version also in development by ZF

Reduction
hub
Caterpillar D7E electric drive

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Hybrid
Second system alongside traditional drivetrain.
Stores, then provides spare energy

Smooths out power demand highly suited to construction


Assists with inching
Allows a smaller engine to work constantly at optimum efficiency
Requires energy storage
Batteries
Capacitors
Hydraulic Accumulator

Only justifies additional weight and cost


where power demand constantly varies
Technology at prototype stage
Case Diesel electric hybrid hydraulic and electric drive

Source: www.sae.org

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Energy Recovery
Systems to recover energy lost in braking or releasing potential energy
Requires energy storage
Batteries
Capacitors
Hydraulic Accumulator
Flywheel

Can link well with electric vehicles / hybrids


Type of system depends on how machinery is used

Liebherr LH120C energy storage cylinder

Main losses in an excavator are due to braking on body swing


Main losses on a mining haul truck are braking forward motion
Does not really apply to ploughing where resistance is constant

Technology on sale in excavators now (Komatsu, Case, Doosan)


In concept / prototype testing for other applications (Eaton)

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Driveline Solutions Other ideas


Hydrogen drive and fuel cells to electric motors
Powered by farm anaerobic digester
Prototypes link to standard transmission

DCT either alone or in combination with CVT


Twin hydrostatic pumps

Different gearing, working in tandem. Allows lower vehicle weight.

CVT with chain CVT

Powersplit to overcome torque limitations (Oerkilon and CNH)

Torotrak CVT/IVT (with Carraro plus Allison and Tata)


Torroidal traction drive. Fully scalable.

25% fewer wheels!

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Reality check - location


Emerging markets will have a greater impact over the next 10 years
Emissions regulations not the same world-wide
Europe, US, Japan - India

Brazil, China

Unregulated

Sulphur levels in fuel are not the same worldwide


DPFs designed for low-Sulphur fuel
High Sulphur can block the DPF

DEF / AdBlue availability varies through the world


Removal of treatment systems ?
Cost of unecessary components
Loss of 2nd hand value
Off Road lubes may become more regional

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Another dose of the real world


Not all equipment is new
People use Off Road equipment for all kinds of things
Its often abused and overloaded

Lubricant basics will still be valued;


- Parts protection
- Cost (including drain interval)
- Fleet coverage
- Smooth wet-brakes

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The Indian Market

India - Equipment Market Share


(Quoted in Ploughing Ahead)

Confidential and Proprietary. This document should not be copied, shared, or reproduced in any media without the express written permission of Afton Chemical Corporation

Indian Tractor Market


Indian Agricultural power Sources (kW/ha)

608,000 tractors sold in FY2012

1.6
1.4

Diesel Engines
Power Tillers

0.8

Tractors

0.6

Draught Animals

0.4

Workers

0.2
1981

30
20

1991

2001

2009

Tractors/,000 Ha

27
19
8
USA

World
Average

Farm-gate prices
Monsoons (bad in
2012, good in 2013)
Availability of credit
(harder with the Rupee
suffering)
Government support
for mechanisation and
rural development

Significant potential for growth

10
0

Low tractor density half the world average


50% of villages do not
have a tractor
Fewer farm workers
Low crop yields - better
productivity needed
Non-agri applications
(~20% of sales)
Export industry good
sales in US

Drivers

0
1971

>4 million tractor population

Electric Motors

1.2

Enablers

1.8

India

Source: CRISINFAC, TMA Analyst Report

To 16m units by 2030 (source Kotak)

North India historically strong


Big growth now expected in the South

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Growth Returning
The auto industry may be struggling, but tractor sales strong
Rebound from last year domestic sales up 22% year-on-year to Aug 13
Declined November 2011 mid 2013

Mahindra sold fewer tractors FY 2012-13 than 11-12

Growth now forecast


ICRA Research: 0-3% FY2013 with volume CAGR of 8-9% to 2018
700000

Sales domestic and foreign - units

600000
500000
400000
300000
200000
100000
0
2003

2005

2007

2009

2011

2013

Source : CMIE Database; ICRA , Media

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Export Markets Doing Well


Strong growth in export markets
Mahindra establishing strong presence in US
Dealer network, customer service, sponsorship

A need to match needs of other global markets


User preferences
Local emissions laws and fuel types

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Tractor OEM Market Share Trend


Tractor industry has 13 national and few regional participants
The

share is concentrated in 5 OEMS with >90% volume share


Mahindra continues to dominate

Source : CMIE Database; ICRA , Media

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Indian Tractor Industry Hardware Trends


Trend to higher HP (>40)
Traditionally a medium HP market - 31-40 HP were >45% volume
Remains lower than global average (~120hp in W. Europe)

Source : CMIE Database; ICRA , Media

Transmission and hydraulics offer big fuel efficiency opportunity


Matching technology to applications offers up to 15% improvement (Source: TAFE)
Lubricants can help enable, or even add to this

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Oil Immersed Brakes


Since introduction (2000), wet brakes grown in prominence

Initially higher hp tractors


Now becoming a major part of the market
Fluids moving from gear oil to tractor fluids
Previously, 85 % of market in the GL4 category

Off Road equipment typically uses oil-immersed brakes

Keeps out dirt


Provides longevity under high loads
Oil provides cooling

The wet brake is usually incorporated into the axle


Friction properties are critical

High enough to make the machine stop


Smooth enough to prevent stick/slip and noise
Too low could reduce brake capacity or cause brake reaction lag

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Brake Squawk (chatter) [video needs sound]

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CE Industry Demand Drivers


Agri far outweighs construction
~600,000 tractors vs 90,000 in construction
~half non-agri equipment is back-hoe loaders
JCB is dominant in construction
but huge growth expected

Drivers

New Roads and Bridges


NHDP expected to generate USD 55 billion orders
in next 5 years

Maintenance of national and state


highways and other roads
Development of green field port and
airports and capacity expansion of
existing ones
Water and irrigation projects, urban
infrastructure development and
transportation, Water supply and
sanitation
Capacity expansion in steel, cement, oil
refining and power sector
Equipment rental business
Export opportunity leveraging low cost
competitive supply position

Enablers

Government support
Investment capital (harder with the
rupee suffering)
Agreement and reduced red-tape

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CE Industry - Key Players


Primary Industry

OEM

Market Leaders in

Construction

JCB

Backhoe Loaders

L&T Komatsu
L&T Case

Excavators (higher capacity)


Vibratory Compactors

Telcon

Excavators (low to mid capacity)

Volvo Construction Equipment

Vibratory Compactors

ACE, ECEL, TIL

Pick and Carry

Schwing Stetter, Greaves Cotton

Transit Concrete Mixer, pump

Others : Doosan, Liugong, M&M, Sumitomo,


Hyundai, Kobelco, Sany, XCMG etc

New entrants

BEML

Dumper, Dozer

Caterpillar

Wheel Loader, Dumper, Dozer

Komatsu

Dumper

Volvo, MB, MAN, Scania

Higher Capacity

Tata, Ashok Leyland

Low to mid capacity

Mining

Tippers

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Typical Off Road Fluid claims


Most tractors have large initial fills (30 to 50 litres)
Service oil changes seldom take place as most of it is managed in top up
Smooth Wet Brakes

No squawk / chatter, but maintaining effective braking

Parts protection

Protecting gears, preventing corrosion etc for long-lived parts and low maintenance costs

Temperature range coverage

Capable in all temperatures from cold to hot

Meets OEM requirements

Suitable for use in e.g. Mahindra tractors

Cleanliness

Keeps parts clean

Smooth hydraulics
Universal

Easy useage as one oil covers axles, hydraulics, transmission etc

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Summary

Improved fuel efficiency and productivity required

Extended drain intervals


Usage of oil-immersed brakes increasing in India
More and more tractors being sold
Horsepower increasing rapidly
Increased hydraulic flow rates

Increased gearing
Novel driveline systems being used

Impact

Trend

Off Road Trends - Summary

Much bigger market


Brake chatter is crucial
Longer-lasting friction durability required
Protection for transaxles is demanding
Needs maintained performance with water
Longer drain intervals

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There are many reasons to choose Afton Driveline


Is the market and technology leader for Automatic Transmission Fluids
Expertise and breadth
Was first to market with DEXRON VI technology
Exclusive SF approvals available
Leaders in dual-clutch

Ploughing AheadTM in Off Road


Bringing change to the market through insight and technology
Comprehensive range of UTTO, STOU and TO-4 technology

Offers the Axcel family of core and booster gear oil additives
Approvals from all leading OEMs
Logistical benefits and the most cost effective treat-rates

Aftons axle technology has proven durability: 30 times around the world
Manual transmission fluids designed for India

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Thank You

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