Tractor firms not ready on emission

The Tractor Manufacturers' Association is likely to make a representation to the surface transport ministry in the next few days to get the April 1 deadline for the implementation of Bharat Stage-III emission norms deferred by a few months.

One of the reasons behind the demand is an estimated inventory of around 50,000 units at dealer locations that are not Bharat Stage-III complaint.

The association's president, RC Jain, said though most of the players were either Bharat Stage-III ready or in the process of getting ready, the combined effect of high-level of finished stock inventory and the approaching peak selling season that started in March would work in favour of extending the deadline.

The Bharat Stage-III norm that is stipulated to be effective from the beginning of the next financial year, seeks to push the bar up in terms of pollution control levels.

Although most other players in the Indian automobile sector, like passenger car manufacturers, have already announced the roadmap for fresh stock rollout, the tractor industry is faced with high inventory levels of stock that do not comply to the new standards.

Unlike in the case of passenger cars, where BS-III implementation will be only in 12 cities to start with, tractors are stipulated to become BS-III complaint nation-wide from April 1.

Spokespersons of the three big players in the Indian tractor mart, Mahindra & Mahindra (M&M), Escorts and Eicher, confirmed that they were ready for Bharat Stage-III implementation and would be able to release fresh stock by April 1.

Chennai-based Tractor and Farm Equipment Ltd (Tafe), however, could not be contacted. Market sources pointed out that some of the smaller players might even have some technical problems in terms implementing the new standards.

Jain said tractor manufacturers would be discussing the issue on Monday and decide on whether the industry body must approach the government for a reprieve of three to four months that might see them through the season. He also indicated that there was good chance the body might decide in favour of the representation.

The strong farm lobby, according to industry sources, should work in favour of the companies.

Sources in the industry further said the new emission standards were likely to push the price of tractors by 2-2.5 per cent or around Rs 6,000-80,000 a unit.

The largest player in the 245,000-odd units tractor market in India is M&M, which, according to the manufacturers' association, had clocked sales of close to 47,000 units for the nine months ending December 2004.

The other major players in the market are Eicher (13,700), Escorts (26,100), Tafe (24,200) and Punjab Tractors (22,300 units), Sonalika (19,300 units).

The current financial year has been particularly a good year for the tractor industry, with sales by end of the financial year expected to be around 245,000 units or a good 28 per cent jump over the 191,400 units sold in 2003-04.