Rains bless tractor sales

Industry expects 40% growth in festive months, 10-12% during fiscal

While the auto sales continue to be in slow lane, good monsoons have given tractor makers a reason to cheer. After degrowing marginally last year, the industry is back on track and expects to end this year with double digit growth. Especially, during the festive months of October and November sales are likely to be up by 40 per cent over last year.

A Pune based tractor dealer said, "Enquiries are up by 70-80 per cent compared to last year. I would say in the last two years we have not seen such demand." In fact, Maharashtra has seen a very good growth in terms of sales during the first half of the year, claim industry insiders.

Kumar Bimal ,vice president,marketing,International Tractors Ltd (ITL), part of the Sonalika Group, said, "In the last three months, tractor sales have been up mainly on the back of good monsoons, especially in Maharashtra region, where the industry sales during the first half of the year (H1) have been up in the range of around 50 per cent year on year (yoy). Like for example, we have sold around 3,000 units in Maharashtra during H1, compared to 1800 units during the same period last year." Maharashtra last year was affected by draught like conditions with not much groundwater available for farming, he explained.

So far this fiscal, ITL has sold 31,714 tractors across the country, up 30 per cent from last fiscal's 24,372 units. Bimal further said, "October would see a significant rise in sales with Navratri, Dussehra and Diwali (early November) falling back to back. Around 40 per cent yoy rise in sales is expected." He, however, did not wish to comment on the current booking status citing competition issues.

Farmer sentiments are very positive this year, said Sanjeev Goyle, senior vice president,marketing & appliTrac, Farm Equipment Sector, Mahindra & Mahindra Ltd. "The farmer sentiment is positive thanks to good rains this year, and the minimum support price (MSP) has also been revised," he said. The MSP is the assured price at which government buys major farm produce to give farmers assured markets, which also acts as a base price for private traders.

Goyle added that while at the beginning of the year, the general expectation was that the industry would grow by around 5 per cent, however, with good monsoons and the current trend, it looks as the industry would be able to clock a 10-12 per cent growth over last year. Around 527,000 tractors were sold last fiscal, which was down marginally on a year on year basis.

Mahindra has sold 25,922 tractors in September, up 37 per cent from last year same period. Overall domestic tractor sales for the company was up 24 per cent to 128,626 units. Rajesh Jejurikar, chief executive, tractor and farm mechanisation, Mahindra & Mahindra Ltd had said recently, "On the back of a good monsoon, we are delighted with a 37 per cent growth in tractor sales despite the traditionally low buying period in September. We see a healthy growth continuing over the next few months."

Even tractor makers like Escorts Agri Machinery, which had reported flat sales (0.24 per cent growth) in the month of July, saw sales improving in the months of August and September.

Sameer Tandon, chief sales and marketing officer, Escorts said, "In the last three months, the industry has grown by over 20 per cent and Escorts too has grown by 34 per cent in September and by around 16 per cent in August."

According to industry analysts, demand for tractors have revived in key regions like Maharashtra, Gujarat and Madhya Pradesh which had faced draught like situations last year. With sentiments being positive, the festive season sales are likely to see an upsurge in sales, they add.