The Hindu Business Line : Exports, southern markets to power tractor sales

A HIGH double-digit jump in exports and growth momentum in the southern States will see the tractor industry cruise to the 275,000-280,000-units levels this fiscal.

In fact, the tractor industry is expected to cross its all-time high of about 270,000 units, recorded in the year 2000.

According to Mr R.C. Jain, President, Tractor Manufacturers Association (TMA), exports have grown upwards of 60 per cent in the first eight months of the fiscal to 19,300 units as compared to 12,200 units in the same period last year.

John Deere, formerly L&T-John Deere, saw the largest increase in overseas sales with 70 per cent growth.

In fact, while in the last fiscal year John Deere posted export sales of 8,500 units, the figure for the company is already about 7,500 units in the first eight months of the current fiscal.

Mahindra & Mahindra, TAFE, Sonalika and New Holland also saw a significant increase in export volumes in the period.

Overall, tractor exports are estimated to end at about 32,000 units this fiscal, compared to 27,700 units last year.

Meanwhile, in the April-November 2005 period, the overall tractor industry has grown by about 13 per cent to 186,000 units (165,000 units).

Karnataka, Tamil Nadu, and Maharashtra grew at over 50 per cent in the period, even as major tractor markets such as Madhya Pradesh, Bihar and Uttar Pradesh saw a significant dip in sales.

In fact, Karnataka saw the highest growth at 90 per cent to 16,400 units in the period, followed by Tamil Nadu where sales of tractors grew 55 per cent to 10,200 units. Sales in Madhya Pradesh, meanwhile dipped by 21 per cent in the first eight months of the fiscal to 20,000 units, while sales in Bihar declined by 22 per cent to 8,300 units.

"Poor availability of financing by bankers in States such as Madhya Pradesh, Uttar Pradesh and Bihar affected sales. In Madhya Pradesh, for instance, recoveries had not been very good as the State did not see a good monsoon this year.

Meanwhile, private financiers are still shy of entering the Uttar Pradesh and Bihar markets.

The jump in the southern States was primarily due to pent-up demand," Mr Jain said. Further, the southern markets are still lagging behind in terms of farm mechanisation, as compared to mature tractor markets such as Punjab and Haryana.