Tractor major Mahindra & Mahindra (M&M) has decided to invest $26 million (nearly Rs 104 crore) to acquire 51 per cent stake in Chinese firm Jiangsu Yueda Yancheng Tractor Manufacturing Co.

Mahindra & Mahindra is expected to attain No. 1 position in the global market after holding 51% in new Chinese JV. The acquisition of Yancheng Tractors will increase its combined capacity by over 60,000 tractors per year.

The Indian firm M&M is also manufacturing tractors in China through Mahindra China Tractor Co. It has 80% stake in the Chinese venture with Jiangling Motors.

The VC and MD, M&M, Mr. Anand Mahindra said that the company is moving toward its goal to get No. 1 position in tractor manufacturing. The company has a total capacity of about 1.75 to 1.8 lakh tractors including its Punjab Tractors and the Chinese and US operations.

Currently, John Deere is a global leader in the tractor manufacturing field. It has sold 1.6 lakh units in 2007. Yancheng Tractor is the third largest tractor brand in China in terms of volumes sold in 2007. It is a State Owned Enterprise and situated in Yancheng city of Jiangsu Province in China. The MD of M & M is expected to visit China next month to sort out brand and structure related issues.

The stocks of Mahindra fell down by 3 per cent to Rs 567.85 on BSE.