Good monsoon spurred tractor sales during April-July 13

According to TMA data, total tractor sales in April- July saw an increase of 19.88 per cent as against the previous year

The robust demand for tractors in the domestic market has brought smile on the faces of leading tractor manufacturers. According to experts, a bumper monsoon in key regions like western and southern markets and increased demand from the farming community has pushed tractor sales during the period April -July 13 of the current fiscal year compared to corresponding period of the last year. The Industry witnessed 19.88 per cent growth in terms of volume in contrast to passenger car and commercial vehicle segment, which is witnessing negative growth.

According to TMA (Tractor Manufacturers Association) data, total tractor sales totalled 235,592 units(including exports) in April-July 2013 as against 196,509 units in April-July 2012 - an increase of 19.88 per cent. Highest ever sales was reported in April (31.43%), followed by May (21.51%) and June (17.47%). While in July it witnessed an increase of 9.5 per cent.

According to Industry analysts, the demand for tractors revived with good monsoon in key regions like western and southern markets, which faced drought last year. They also added good yields coupled with more remunerative prices for crops, timely arrival of the monsoon across the country and new product launches have propelled tractor sales in the current fiscal.

Speaking to Business Standard, senior officials in Mahindra & Mahindra, the leading tractor manufacturer in India said, "Last year, many parts of the country witnessed drought like conditions like Maharastra, Karnataka, Andhra Pradesh but this year, there has been bumper monsoon in these parts. Further, states like Madhya Pradesh received good rain in Winter. Besides that farmers received better remuneration this year from Wheat, Guar and Soyabean on account of bumper harvest. All these factors propelled the tractor sales in the domestic market. Also, states like Uttar Pradesh and Bihar is responding well to the sales."

On being asked about the growth prospects in the current year, he added, "The centre and state government commitment towards rural development and agri-mechanisation and other factors like scarcity of farm labour, healthy credit availability will push the demand. Also factors like good monsoons and higher minimum support prices for agricultural produce will drive the sales."

Earlier, the credit rating agency ICRA has estimated that volumes in the Indian tractor industry this year will expand by five to seven per cent.

The growth in tractor sales has helped bail out many ancillaries that make components for passenger cars. The robust demand for tractors has helped them offset losses that were incurred due to the slowdown in the sales of passenger cars. Besides that, it has also helped the ancillaries to expand their capacities, but the ancillaries are cautious while expanding the capacity.

"The spurt in sales has helped SMEs who are manufacturing tractor parts. But the growth should be sustainable. We expanded in 2011-12, when there was a growth in tractor sales, but the industry witnessed flat growth in 2012-13, which affected our capacity utilization. So we are a little cautious while expanding," said Inderjit Singh Chabbra, managing partner, Continental Engineering Works.

He supplies tractor parts to Eicher, Tafe, Swaraj, Ace and Escorts.