M&M hikes tractor prices by Rs 6,000

Auto maker Mahindra & Mahindra (M&M) today said it has raised its tractor prices by Rs 6,000 from this month due to increase in material cost, a senior company official said.

"Due to higher prices of steel, the alloy used in their (tractor) manufacture, we have decided on a price hike in the tractor segment," Mahindra's Farm Equipment Sector President Anjanikumar Choudhari told reporters here.

Earlier, in 2008, it had raised prices by Rs 20,000 a unit in two stages.

The company expects tractor sales in India to post a modest growth of around 6-8 per cent this year as farm output is expected to be moderate on account of deficient rainfall.

However, Choudhari believes that Mahindra is better placed than its rivals as nearly a third of its customers were financed by group company, Mahindra & Mahindra Financial Services.

The monsoon is a key growth-driver for tractor sales as lack of irrigation facilities in India makes agricultural output crucially dependent on rains.

Tractor sales in India, where agriculture is the mainstay of majority of its citizens, are concentrated in April-June and October-December quarters, when sowing and harvesting takes place.