Tractor industry may clock 9-10% growth in FY17: ICRA

M&M sold 15,918 units in the domestic market in November, down from 20,819 during November 2015

While domestic tractor volumes grew 25.2 per cent in April-October, first seven months of this financial year, it fell in November with the cash shortage after demonetisation.

Market leader Mahindra & Mahindra (M&M) saw a 24 per cent year-on-year drop in sales last month.

Credit rating agency ICRA projects growth of nine to 10 per cent in volumes (domestic and exports) for the entire year, keeping in mind the impact of demonetisation over the near term. In the long run, it maintains a compounded annual growth rate of eight to nine per cent in volumes for the industry over the next five years, saying the long-term drivers remain intact

M&M sold 15,918 units in the domestic market in November, down from 20,819 during November 2015. Total tractor sales (domestic and exports) were 17,262 units, as against 21,717 for the same period last year. Exports for the month were 1,344 units. 

Rajesh Jejurikar, president of M&M’s farm equipment and two- wheeler division, said: “The tractor industry has witnessed this year’s first de-growth, due to the shift in festive season and added effect of demonetisation. We see the latter's impact to be short term and expect continued growth against the backdrop of improved agricultural output.” 

"TAFE, despite continuing to be the second largest player, has lost market share across nearly all regions. International Tractors, which had seen market share expansion over FY12-15, has failed to gain further share and continues to remain the third largest. Escorts has gained market share across all regions. John Deere has followed its market share gains in FY16 with further gains in the current fiscal (seven per cent market share in the first seven months," the ICRA report added.