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Tractor maker, Zetor is relocating production to India and China.
In a move that will ask the question about the viability of manufacturing tractors in high-cost economies, Czechia-based manufacturer Zetor is to stop making tractors at its Brno factory and relocate production to India and China.
The Czech manufacturer has a history dating back 80 years, with its first tractors built in 1946, driven by a philosophy of robust, simple to operate and practical tractors, with attractive pricing, leading to familiar models such as Crystal, Proxima and Forterra.
They also lay claim to being one of the first tractor manufacturers to fit what we know as safety frames.
Róbert Harman, CEO of Zetor Tractors comments in a recent press release, “Manufacturing small and medium-sized tractors up to 130hp in Europe no longer makes economic sense under the current conditions”.
He says, due to high energy prices, labour costs and, above all, material costs, they are no longer as competitive as they need to be, so must change the way they operate.
“Zetor cannot subsidise production in Europe. We must manufacture where we can generate profits and invest in further development.”
Brno will continue to serve as the company’s headquarters, continuing to develop its engineering, sales and service operations, including the sales, assembly and logistics of spare parts for tractors previously sold to customers. R&D will also remain in Brno and continue to design, develop and expand its range in response to demand for new models
The company says it will continue to offer tractors for the European market, currently developing two tractor ranges that will be manufactured by Zetor India under a joint venture with VST, the first to be launched in Europe in 2027. Zetor is also seeking a manufacturing partner in China and preparing its own production plant in Asia to ensure greater independence in manufacturing.
The company notes that it will continue to retain key components from proven suppliers, including front axles from Carraro, Carraro and ZF transmissions, Mita hydraulics, Fritzmeier cabs, and Deutz and Cummins engines, specifically for the European market.
Many of these key components are already being manufactured in Asia with lower material costs, so relocating the entire tractor production closer to these key suppliers will enable the company to remain competitive in European markets, achieve greater profitability and generate resources for the further development of the brand.
“Our goal is to export approximately 5000 tractors from both India and China within the next five years,” says Harman.
Here in New Zealand, Zetor tractors were assembled and distributed by Motor Holdings at their Takanini facility, with the first 1000 sold over seven years and a further 1000 units over the next three years. Distribution moved to CB Norwood in 1987 and to Hamilton-based Doug McFarlane in 1982.
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