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Agricultural equipment markets in BRIC – Opportunities and challenges for OEMs

2014

As in many other industries, the size and growth potential of the BRIC markets have been attracting the attention of OEMs in mature agricultural markets for more than a decade now. In terms of volume growth, the BRIC markets have developed well in recent years and also enjoy a positive growth outlook.

Regional requirements in BRIC markets still differ strongly from the standards seen in mature markets, and also vary between countries:

  • Brazil: High technology level driven by large farm size and demand for precision-farming equipment
  • Russia: Relatively large share of Western-style equipment but large replacement demand and growing political uncertainty
  • India: Low technology level expected to persist as farms remain small
  • China: Overall low technology level with domestic manufacturers starting technology projects with state support

These differences pose a significant challenge to OEMs in mature markets and require differentiated market strategies. While in Brazil and Russia several OEMs are running successful operations, most of the players have so far only been able to make slow inroads into India and China. For these OEMs, flexible modular strategies will play a decisive role in their future positioning in these markets.

The attached study focuses on the similarities and differences between the BRIC markets. It shows how modular concepts can be used not only to realize the growth potential in Brazil and Russia but also to address the high market volumes in India and China. It also tells how we derived key success factors and which levers should be considered for implementation.

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