From tractors to e-bikes

Millat Tractors’ MoU is sign of entry into a tough new market

Millat Tractors is known for its tractors, though it makes other agricultural machinery, including forklifts, generators and implements. It has played a major role in the Green Revolution in Pakistan, which relied on mechanization as a major pillar. Now it is going to enter what might be called the opposite end of the automotive market. From the huge rugged tractors it is going into the manufacture of e-bikes, and has signed a Memorandum of Understanding with a Chinese company to this effect. Millat Tractors Limited will assemble, manufacture and market e-bikes in partnership with what it describes as a major Chinese manufacturer of e-bikes.

This is being done through one of Millat’s subsidiaries, not the main company, which provides a certain degree of insulation.

This might seem a somewhat surprising decision for a tractor maker, but there are certain factors in its favour, the first being that it has a number of non-tractor products, and even its generators have allowed a crossover out of agricultural equipment. The company, therefore, does not have the tunnel vision its record might lead some to conclude. It also has experience in foreign collaboration, having a long and successful collaboration with Massey-Ferguson, whose tractors they make. This has also given them much experience in vehicle financing, because most of its sales were via the Agricultural Development Bank of Pakistan against land ownership documents. This is particularly relevant now because the government aims to make riders convert to e-bikes through obtaining bank credit. There are a number of schemes proposed by the government, but so far the banks’ ratio of approvals is low. Millat Tractors may find that its past institutional experience may be useful, for other e-bike makers usually have origins as petrol bike manufacturers or assemblers, which has usually been a cash business.

Millat Tractors, originally Rana Tractors before nationalisation, had played a major role in the execution of the Green Revolution of the 1960s. It has now positioned itself for a similar pivotal role in the electric vehicle revolution. With the Prime Minister repeating his call for a switch to renewables for both power generation and vehicular transport, it seems particularly appropriate for Millat to carry out this project on its way to building e-tractors, which will be as revolutionary for agriculture as diesel tractors were in the first place.