The Hindu Business Line : Tractors ride 10.5 pc high last fiscal

According to the Tractor Manufacturers Association (TMA), the last fiscal saw the industry grow by a sizeable 10.5 per cent to end with sales of about 1.9 lakh units, as compared to about 1.7 lakh units in the previous year.

In fact, 2003-04 fiscal saw the tractor industry recording its first year of positive growth after four continuous years of de-growth.

Rough calculations show that in value terms the industry has grown to Rs 4,775 crore in 2003-04 from about Rs 4,300 crore in the previous one.

Interestingly, most of the growth was driven in the latter half of the year. "The last quarter of the fiscal saw tractor sales grow by about 40 per cent. The month of March alone saw sales grow 33 per cent", Mr R.C. Jain, President of TMA and Chief Executive - Group Affairs of the Eicher Group said.

The industry had de-grown by about 17-20 per cent in the first six months of the current fiscal, with the first positive growth being recorded only in October.

While the good monsoons had ensured a higher cash surplus, with the farmer thus providing a fillip to the demand for tractors, the impending hike in prices of tractors announced by manufacturers also ensured that there was a rush to purchase a tractor in the last quarter of 2003-04.

"Most companies had announced that prices on tractors would be increased due to rising costs of inputs, effective April 2004. Thereby, the last quarter of 2003-04 saw more farmers and dealers pick up tractors resulting in higher wholesale and retail sales", Mr Jain said.

Prices of tractors have since increased by about 3-5 per cent, translating into an increase of about Rs 7,000 to Rs 12,000 per tractor, depending on the cost and model.

Further, the year also saw a reduction in the interest rates on tractor loans and a general simplification of the financing process for the farmer, with tractor makers tying up with a number of banks and other financial institutions.

Almost every region saw an improvement in tractor off-take in the year excepting Punjab and some areas in the South.

On the other hand, States such as Rajasthan, Madhya Pradesh, Maharashtra, and Uttar Pradesh among others are believed to have seen high growth in the year.

Even the multinational companies, mainly L&T John Deere, New Holland and SAME Deutz-Fahr, saw high growth though off a smaller base.

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