Domestic tractor sales register 15% growth in first quarter

Vijay C Roy

Tribune News Service

Chandigarh, July 25

Expectations of good monsoon coupled with higher MSPs (minimum support price of crops) has steered the domestic tractor sales. The industry has registered a 15% growth during April-June 2016 as compared to the corresponding period previous year.

According to the Tractor Manufacturers’ Association, the total domestic sales during the period under review were 97,597 units as compared to 84,960 units during the corresponding period previous year.

The domestic tractor market is predominantly dominated by medium horse-power (HP) which varies from 31-50 HP range. According to experts, over 80% of the tractors sold in the domestic market are in the medium HP category.

Experts say April and May usually are higher offtake months due to filling up of inventory and this time around the low base of last year will also reflect in a stronger double-digit growth.

According to credit rating agency ICRA, tractor sales will improve gradually in the current fiscal if monsoon is normal during FY17.

On being asked about the outlook for the current year, AS Mittal, vice-chairman, International Tractors Ltd and makers of Sonalika tractors, said, “There is a forecast of good monsoon this year which is likely to steer the industry volumes. Secondly, there has been a modest increase in MSP in the past two years and there are high expectations among the farming community. If both the factors work in favour of farmers, we expect the industry will attain a double-digit growth this year.”

Analysts further said the government’s thrust on rural development, especially on irrigation programmes and farmers’ welfare in the Budget, will improve farm sentiments as well as farmers’ income, resulting in tractor sales.

In 2015-16, sale of tractors in the domestic market remained sluggish for the second consecutive year due to weak farm sentiments. The industry witnessed a decline in sales of over 10% in the last fiscal whereas the sales were down 13% in 2014-15.

According to data, 4,93,764 tractors were sold in the domestic market in 2015-16 as compared to 5,51,463 units in 2014-15.