Tractor sales grow as monsoon, govt help for farmers lift rural economy

Tractor makers continue to report higher sales in July, aided by the government’s cash help for farmers, higher Kharif sowing, a timely and normal monsoon cumulatively across June and July. Companies expect to reach full capacity in August after fixing supply chains that collapsed in the months-long lockdown to contain the coronavirus.

Mahindra & Mahindra’s Farm Equipment Sector (FES) reported a 27 per cent growth in tractors sales to 25,402 units in July, compared to 19,992 units a year ago in the same month. Domestic sales rose by 28 per cent to 24,463 units in July from 19,174 units, a year ago.

Escorts reported a 9.5 per cent growth in July to 5,322 units, compared to 4,860 units. Domestic sales rose by 9.9 per cent to 4,953 units from 4,505 units, while exports grew by 3.9 per cent to 369 units from 355 units, a year ago.

Sonalika Tractors reported a 71.7 per cent growth in domestic sales to 8,219 units, compared to a year ago. The company sold a total of 10,223 units, including exports. The comparative figures were not available.

Hemant Sikka, president of farm equipment sector at Mahindra & Mahindra, said, “These are our highest ever July sales. The strong demand momentum continued, aided by positive sentiments due to good cash flows to farmers, higher Kharif sowing, a timely and normal monsoon cumulatively across June and July and continued higher rural spending by the government".

Escorts said the company had supply chain challenges in July and as a result it could operate only at about 50 per cent of its capacity The situation has eased July end, and the company expects to go back to full capacity anytime up to mid-August 2020. 

Raman Mittal, executive director at Sonalika Group, said, tractor demand and farmer sentiment have picked up on account of various conducive factors like increase in MSP price, favourable monsoons and bumper sowing of summer crops. "Positive sentiments are expected to continue and we are well positioned to gain from the same," said Mittal.