Deficit monsoon hits tractor market growth

Pulls down market by almost 14% in first six months of current fiscal

Deficit monsoon have hit the tractor segment in India and pulled down the market by almost 14% in the first six months (Apr-Sep 2015) of current fiscal.

Before the onset of the monsoon season, the tractor industry had projected growth of 10% during the current fiscal year to top up the sales of 5,50,000 tractor units in India reported last year.

"The sub optimum rainfall has hit other segments as well and tractor is no different. Due to deficient rainfall, the farm economy was hit and consequently the tractor market growth also got affected," Sonalika International Tractors Limited president (sales and marketing) Rajesh Kumar Singh told Business Standard here today.

Today, tractors are used equally for both agricultural and non-agricultural purposes, especially haulage operations in construction sites and mining.

"The slowdown in mining due to stringent environmental norms has also contributed to the dip in the tractor space," he claimed.

Sonalika is India's third largest tractor manufacturer. Last year, it had sold nearly 13,000 units in Uttar Pradesh. This year, it is aiming to up its market share in UP to 15% compared to 14% last year.

UP is the country's largest tractor market and had clocked sales of about 95,000 units last fiscal. The state contributes over 15% to Sonalika's revenue.

The company plans to introduce 3 new products this year in the 30 Horsepower (HP) and 60 HP categories to suit specific requirements of consumers.

Sonalika has 213 dealers in UP and Uttarakhand, which is the highest among the key tractor players in the region.

Tractors with lower power capacity of 30-40 and 40-50 HP are popular in UP due to less farm mechanisation compared to more agro progressive states such as Punjab and Haryana, which have larger land holdings but face farm labour shortage.