While the rest of the economy reels under the impact of COVID-19, India’s tractor industry could be out of the woods soon. The numbers of June are hinting towards good growth in the domestic tractor segment. CRISIL, a rating agency, estimates tractor sales of FY21 to be just 1% below last fiscal’s numbers. The estimate came after when in April & May, the volume dipped 37% year on year.
CRISIL has estimated earlier about double digit dip in automobile sales in FY21, but tractor sales estimates shows a contraction of only 7-9%. Tractor production in the country has jumped about 50% YOY in June across factories to meet demand. Experts believes that this is due to record crop output & good monsoon forecast.
Due to the strong demand of tractors, Escorts domestic tractor sales in June grew 23%. It clocked Month on Month improvement of 65%, with domestic tractor sales at 10,623 units.
Focusing on the export front, in June 2020, the tractor sales stood at 228 against 312 tractors sold in June 2019.
According to Mahindra & Mahindra, their domestic tractor sales grew 12% to 35, 844 units last month from 31,879 units in June 2019. For export front, it went down 42% to 700 units from 1,215 units in June last year. But Mahindra & Mahindra reported 10% growth in total tractor sales at 36,544 units in June.
The president of Farm Equipment Sector, M&M, Hemant Sikka attributed the double digit growth to A record Rabi Crop, Agri Initiatives by the Govt, Good Sowing of the Kharif Crop, Positive sentiments among farmers & Better cash flow in rural markets.
He also estimates that the demand will continue to remain on top in coming months. The tractor companies gained intraday on the back of strong June sales figures.
