Tractor makers farm growth thanks to a bountiful monsoon, a favourable Kharif season and rise in disposable income in rural India.
05 Oct 2020 | 40507 Views | By Nilesh Wadhwa
The overall Indian economy may be seeing some optimism due to opening up of restrictions, which has translated to some revival in demand. For the automotive industry, which has seen some green shoots of recovery, there is one particular segment that has been charting consistent robust growth – the tractor ...
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The overall Indian economy may be seeing some optimism due to opening up of restrictions, which has translated to some revival in demand. For the automotive industry, which has seen some green shoots of recovery, there is one particular segment that has been charting consistent robust growth – the tractor segment.
It is no secret that the world’s largest tractor market both in terms of production and sales happens to be India. While the Covid-19 disruption at a time when the country saw reverse migration, a bountiful monsoon, a favourable Kharif season and rise in disposable income in rural India have ensured that tractor manufacturers are benefiting from the speedy sales momentum driven by rural India demand.
A closer look at the total estimated tractor sales from January to September reveals that the industry reported an average growth of 50% despite lockdown and pause on sales in April. In the first nine months of CY2020, total tractor sales have crossed the half-a-million mark at 587,359 units, which translates to an average monthly sale of 65,262 units.
For September 2020, total domestic tractor sales were 108,649 units, a growth of 28.4 percent compared to the same period last year. Interestingly, among the 14 tractor makers, except for two OEMs, everyone reported positive YoY sales. The world’s largest tractor maker Mahindra & Mahindra sold 42,361 units (Mahindra + Swaraj sales combined), compared to 36,046 units for the same period last year.
Hemant Sikka, President - Farm Equipment Sector, Mahindra & Mahindra said, “We have sold 42,361 tractors in the domestic market during September 2020, a growth of 18% over last year. Retail demand continued to be buoyant backed by a very good monsoon, higher kharif acreage and continued government support, including higher MSPs for key crops. We are looking forward to a very robust demand for the festive season ahead. In the exports market, we have sold 1,025 tractors, a growth of 6% over last year.”
For the month, Chennai-based Tractors and Farm Equipment (TAFE) reported 38 percent YoY growth in its sales at 19,973 units.
Sonalika Tractors reported breaking all of its previous monthly sales records with a robust market performance in September 2020 and also for the first half of fiscal FY2021. Sonalika reported its highest ever overall sales of 17,704 tractors in September, a robust growth of 51.4 percent. Meanwhile, in the first half of FY2021 (April-September 2020), Sonalika Tractors has clocked its highest ever H1 sales of 63,561 tractors and 26,530 implements.
Commenting on the result, Raman Mittal, executive director, Sonalika Group said: “We at Sonalika have registered 17,704 overall tractor sales in September 2020, breaking all our previous monthly records and marking the highest ever sales in a month. Our cumulative overall sales is the highest-ever H1 tractor sale. highest ever H1 tractors sale. Along with tractors, our implements business has recorded 26,530 unit sales, which beats our FY’20 sales in just 6 months. Our recently launched four new tractors have been very well accepted by the farmers as their performance has surpassed previous benchmarks in addressing their crop-specific needs. These next gen new product series – Tiger, Sikander DLX, Mahabali and Chattrapati – have contributed significantly in our phenomenal growth during the pre-season time and even during the pandemic.”
Mittal too is optimistic for the upcoming festive season. He said “We are buoyant about the upcoming festive season and expect the farmers’ sentiments to remain positive. The overwhelming response received for our recently launched tractors, customised for specific markets, has built a platform for us to capitalise on prevailing positive sentiments in the market. We are fully geared up to further strengthen our growth performance across tractors and implements this festive season while continuing to surpass industry growth.”
With the upcoming festive season expected to further bring customers to showrooms, small and large tractor makers alike look to further grow sales.