Mahindra & Mahindra Ltd to Exit Japan Agri Equipment JV Amid Rising Losses

Key Highlights:

• Mahindra to liquidate Mitsubishi Mahindra Agricultural Machinery in Japan.

• Production and sales are expected to stop by the first half of FY2027.

• FY2025 revenue stood at Rs 2,094.17 crore.

• The Japanese unit had a negative net worth of Rs 17.74 crore.

• The move aligns with the global farm strategy review.

Mahindra & Mahindra Ltd (M&M) has announced that its Japanese associate company, Mitsubishi Mahindra Agricultural Machinery Co Ltd, will exit the agricultural machinery business and begin liquidation. The move comes as part of Mahindra’s broader strategy to restore profitability in its global farm equipment operations.

Strategic Exit from Japan Market

In a stock exchange filing on Monday, M&M confirmed that Mitsubishi Mahindra Agricultural Machinery, in which it holds a minority stake, will wind down its research and development activities, production, and both domestic and overseas sales of farm equipment.

However, the company will continue to supply spare parts and honour warranty commitments to existing customers. Production and sales operations are expected to stop by the first half of FY2027.

Financial Performance and Losses

For FY2025, Mitsubishi Mahindra Agricultural Machinery reported revenue from operations of Rs 2,094.17 crore. After removing inter-company transactions with the Mahindra Group, the company contributed Rs 1,786.03 crore to M&M’s consolidated turnover, accounting for 1.13% of the total.

As of March 31, 2025, the Japanese associate had a negative net worth of Rs 17.74 crore. The decision to liquidate follows a detailed strategic review, which concluded that the business is unlikely to achieve long-term profitability due to sustained losses.

Review of International Farm Strategy

The exit is part of Mahindra’s ongoing review of its global farm equipment footprint, including markets such as North America, Europe, and Japan. The company has previously indicated that it is reassessing its international strategy due to structural industry challenges.

Chief Financial Officer Amarjyoti Barua had earlier stated that the company is evaluating markets where structural decline limits organic growth opportunities. He noted that Mahindra would pivot in regions with mature and declining market conditions.

On the Japan market, Rajesh Jejurikar, Executive Director of M&M’s auto and farm divisions, highlighted that while Mahindra’s market share remained stable, the overall Japanese farm machinery segment has been shrinking for several years. He pointed to demographic challenges, including an ageing farming population, as a key reason for the prolonged decline.

Previous Impairments and Restructuring

Last year, Mahindra recorded impairments of Rs 79 crore for Sampo Rosenlew in Finland and Rs 77 crore for Mitsubishi Agricultural Machinery in Japan. Both businesses faced profitability challenges, leading the company to implement cost-cutting and operational restructuring measures.

Mahindra’s Global Farm Equipment Presence

Mahindra continues to maintain a strong international footprint in the farm equipment sector. Its global operations include North America, Brazil, and Mexico. The company also fully owns Erkunt Sanayi Traktor and holds a 75.1% stake in Hisarlar in Turkey.

Recognised as the world’s largest tractor manufacturer, Mahindra benefits from strong domestic volumes and an expanding international presence. Its global strategy includes wholly owned subsidiaries, majority stakes, and minority interests across key agricultural markets.

Focus on Growth-Oriented Markets

The decision to exit the Japanese agricultural machinery business marks a significant recalibration of Mahindra’s international operations. By withdrawing from structurally declining markets, the company aims to concentrate resources on regions with clearer growth prospects and sustainable returns.

This move reflects Mahindra’s long-term commitment to strengthening its global farm equipment business while ensuring operational efficiency and profitability.

Also Read: Mahindra & Mahindra Ltd. Tractor Sales Jump 35% to 32,153 Units in February 2026

CMV360 Says

Mahindra’s decision to exit its Japan agri equipment joint venture highlights a clear shift in its global farm strategy. With continued losses and structural decline in Japan’s farm machinery market, the company is choosing long-term sustainability over short-term presence. By focusing on stronger and growth-oriented markets, Mahindra aims to improve profitability, streamline international operations, and strengthen its position as a global leader in the tractor and farm equipment segment.