India is for agri-machinery today what China was for cars 20 years ago: CNH Global CEO

Agricultural and construction equipment manufacturer CNH is doubling down on India as part of its next phase of expansion. In a select media briefing on Tuesday, Gerrit Marx, Global CEO of CNH, told reporters that the company plans to double its tractor market share in India within the next five years. The manufacturer of New Holland tractors is aiming for a 10% share of the Indian market by 2030.

“India is for agricultural machinery today what China was for passenger cars 15 to 20 years ago. When I took office, the first organizational change I made was to separate India from the Asia-Pacific region. I’ve always believed India is a region by itself,” the CNH CEO said.

“With the largest population in the world and purchasing power equivalent to the US, Europe, Africa, and Indonesia combined, India simply cannot be treated as just another market,” he added.

In India, CNH operates through four legal entities: CNH Industrial India, CASE Construction Equipment, CNH Capital, and CNH India Technology Center. Notably, agriculture accounts for 65% of the company’s revenue, followed by construction equipment (32%) and financial services (3%). At present, CNH has three manufacturing facilities in Greater Noida, Pune, and Pithampur. The Greater Noida plant has a production capacity of 60,000 tractors, expandable to 70,000. Plans are already underway to establish a fourth plant in India, with land being scouted for a facility larger than the current Noida unit.

Despite having operated in India for 26 years, CNH holds just a 4.1% market share in the tractor segment. According to Marx, India was not given sufficient strategic importance in the past. “We have not looked at India in the entirety of the potential it can offer to a company like ours. We are now giving leadership and authority over several product lines to our teams in India, empowering them to engineer for both the Indian market and for exports,” he said.

As part of its growth strategy, Marx has outlined a four-point plan to expand market share, viewing India through four lenses: local market, exports, sourcing, and innovation. “India is a very relevant market for us to produce and sell machines locally. We’re on track to reach 5% market share soon, and we see huge headroom to grow. We are making machines in India not just for local farmers but also for Europe, the US, Africa, and Southeast Asia,” Marx pointed out.

According to him, CNH also benefits from a robust supplier base in India that enables competitive sourcing. Moreover, the company’s India Technology Center (ITC) in Gurgaon plays a crucial role in developing cost-efficient digital technologies such as fleet management and auto-guidance systems tailored for Indian farmers.

Weathering the US tariff storm

In calendar year 2024, CNH manufactured 51,000 tractors in India. Of these, 37,000 were sold domestically, while 14,000 were exported to the US, Europe, and the Middle East. Currently, the US accounts for 30% of the company’s exports, while Europe represents 70%.

In light of Washington’s decision to impose a 50% tariff, Marx described the move as a “pause in an ongoing conversation.” He said the company is prepared to absorb short-term pain while leveraging India’s long-term potential as both a domestic and export hub. Shipments to the US have been temporarily suspended.

“We have enough stock of locally made Indian machines in the United States. The North American market is slowing anyway, so we just stopped shipping for now and are waiting for a real deal to emerge. Fifty percent is not a deal—it’s a pause,” Marx said.

Although tariffs make exports to the US less competitive, CNH insists it will not compromise customer commitments. “The tariffs will not distract us from doing the right thing in India, a key region for us,” he emphasized.

“We have enough stock for half a year. But before our stock levels run too low, we would resume shipping—even if that means selling products at a loss. If we need to absorb a loss on a small number of machines because of the tariffs, then so be it. We are here for the long term. We want to be pound smart, not penny foolish, and do the right thing,” he added.

When asked whether CNH could sidestep tariffs by manufacturing compact tractors in the US, Marx dismissed the idea. “Producing utility and compact tractors in the US at scale is not realistic. The driveline and engine supply chain is here in India, not in the US. Adding US labor costs on top of 50% tariffs makes the machines prohibitively expensive,” he explained.

Marx also made clear that CNH is betting tariffs will not last. “It’s hard to imagine tariffs staying at 50%. If needed, India can sub-supply other sites, and we will adjust our footprint accordingly. But in this sector, there is simply no way around India,” he said.