Business Daily from THE HINDU group of publications
Saturday, Jul 22, 2006
Business Daily from THE HINDU group of publications Saturday, Jul 22, 2006 |
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Industry & Economy
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HCV/LCV/Tractors Tractor industry to spend Rs 1,067 cr to enhance capacity Our Bureau
New Delhi , July 21 With the tractor industry on an overdrive, domestic tractor manufacturers are set to invest Rs 1,067 crore over the next few years to enhance capacity. Major expansion projects on the anvil include L&T John Deere, which is investing about Rs 360 crore, Sonalika and Escorts Ltd. According to a survey by the Confederation of Indian Industry, 2005-06 was an encouraging year for the tractor sector. The production increased to 2.96 lakh tractors in 2005-06 against 2.49 lakh tractors in 2004-05. Further, better availability of credit and focus on retail tractor financing by the banking sector boosted the growth. As a result, the growth witnessed in 2004-05 continued in 2005-06. Going forward, due to a good monsoon and water availability during the year, crop production is expected to be higher by 2.5 per cent over last year. The sales performance of the tractor industry is also showing an increasing trend over the last three years. M&M led the growth in the domestic industry. However, the industry has had to bear the impact of hikes in the price of raw materials. Over the last three years, the prices of important input materials such as steel, pig iron and rubber have increased continuously. Margins therefore continued to be under pressure, despite the upturn in the industry. The export performance has also been encouraging. The country exported 28,118 tractors in 2005-06, a growth of 41 per cent over last year. The exports in this sector over the last three years are also growing at a rapid pace.
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