A letter of intent has been signed with one of the biggest Indian agricultural equipment producer

The framework of the agreement includes the redesign of the new range of agricultural applications destined for the most important international market in terms of volume

Pune (India), 15th February 2012 – Carraro Group, which currently has 2 production plants and a research centre in India, employing over 1,000 people, is strengthening its presence there with the signing of a letter of intent with one of the biggest Indian agricultural equipment producer. The letter defines the partnership for redesigning the new range of tractors of this prestigious Indian company.

One of the main players in this agreement is Carraro Agritalia, the Business Unit of Carraro Group specialised in the design and manufacture of special tractors for the world’s biggest tractor producers. The Business Unit will, in fact, be extending its design capacity in India thanks to a multi-year cooperation.

Following this agreement, the indian Group will aim to increase its market share in India by 50% over the next 5 years (the figure currently stands at around 14%), bearing in mind that – in terms of volumes – that country is the main market in the world today, with over 600 thousand vehicles produced every year. It is estimated that this figure will rise to 1 million by the year 2017.

More specifically, Carraro Agritalia is called upon to manage the modernisation project with regards to the style and ergonomics of the existing range of tractors, destined for a market with a growing level of sophistication. Future plans include a review of the entire range of vehicles manufactured under various names by the indian company; this is to meet the demands being made by the new generations of farmers, who need to replace obsolete machines.

Carraro Agritalia’s task will involve about ten 40hp-70hp tractor models, for which many structural, functional, aesthetic and ergonomic details will be almost entirely re-engineered (from the gear levers to the seats, from the dashboard position to the cabin structure, etc.). In terms of the market, this project will bring substantial changes to over 80 thousand tractors.

The initial phase of the project will last 3 years. An international team of engineers will be set up in India, with local people working alongside Carraro Agritalia employees. The size and structure of this team will be in proportion to the workload in each single phase.

Thanks to this project, Carraro Agritalia will strengthen its own partnership with a leading client, and will also acquire strategically important know-how for both the core business of the Group (transmission systems) and for the BU itself.

Over the three years, it is estimated that Carraro Agritalia’s direct return will be over 3 million Euros. Indirectly, there should be a positive impact on the work of the Drivelines BU (axles and transmissions) and the Components BU (transmission gears); these two are already linked with the major indian Group thanks to a supply partnership.

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Increase of the turnover during the first nine months compared to the previous fiscal year, mainly thanks to the growth of the traditional reference markets, agriculture and construction equipment.

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Preliminary estimates for 2011 results

- Consolidated turnover of more than € 924 mln (+29% compared with 2010)