Despite the not-so-encouraging initial forecasts about the monsoons, tractor major Mahindra & Mahindra today sounded confident of maintaining last year's sales momentum and grow in double-digits.
While the industry closed fiscal 2017 with a 18 per cent growth, we clipped at 23 per cent. We hope to maintain this momentum and grow in double digits in sales volume, M&M president for farm equipment sector Rajesh Jejurikar said without quantifying the sales target.
He further said though the initial forecasts are a bit negative with a projected deficiency of 5 per cent, tractor sales are not solely dependent on monsoons of the next season but more on the past year's rainfall pattern.
It also depends on the rain distribution, the reservoir levels, which determine the farmer sentiment more.
In fiscal 2017, M&M, which increased its market share by 180 bps to 42.7 per cent, sold 2.48 lakh units, a growth of 23 per cent, while exports rose to 15,000, he said, adding against this the industry grew 18 per cent to 5.82 lakh units.
For the industry which bled in the previous two years, this was the second best in volumes after fiscal 2014 when it had notched up a volume of 6.35 lakh, Jejurikar said.
On the impact of the GST on the farm equipment sector, he said its difficult to forecast anything as the rates are not announced yet.
Currently, farm equipments attract zero excise duty while the VAT varies from 5 to 6 per cent.
Jejurikar, who was speaking to reporters after launching a small tractor Jivo, said the company has invested Rs 95 crore to develop the new machine targeted mainly at affluent horticulture farmers.
The new four-wheel drive tractor Jivo is priced between Rs 3.90 lakh and Rs 4.05 lakh (ex-Maharashtra).
The tractor is available in the four-wheel drive version with engine power of 24 horse power. With its launch, Mahindra enters the growing segment of horticulture and row crop farming.
"The Jivo has been designed keeping in mind the latent needs of this specialised farming segment and is an ideal choice for the farmers owing to its narrow and compact build and high power," he said, adding the tractor will be available in Maharashtra and Gujarat from April 25 to begin with and later on in Karnataka and Madhya Pradesh.
The Jivo can be used across multiple applications including crop care, land preparation and inter culture activities, he said, adding they will be launching a 20 HP two-wheel drive Jivo around September.
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