The Hindu Business Line : Tractor sales set to record 31 pc growth this fiscal

THE growth momentum in the domestic tractor industry continues in the current fiscal. In fact, the industry is all set to close the year with a sales growth of 31 per cent to about 245,000 units, said Mr R.C. Jain, President of the Tractor Manufacturers Association (TMA).

This is only a shade away from an all-time high of about 270,000 in 2000. Tractor sales, it may be recalled, fell from 270,000 units in 1999-2000 to 1,70,000 units in 2002-03.

But the last financial year, helped by good monsoons, saw a revival in the industry, with sales growing by 10.5 per cent to 1.9 lakh units.

"We expect the recovery in the market to continue. The industry should grow by around 10 per cent to a level of 275,000 in the next fiscal," said Mr Rakesh Chopra, Business Head (Agri Machinery Group), Escorts Ltd.

According to industry analysts, the major factors driving the industry this year have been easy availability of finance (with a reduction in interest rates) and good cash flow to the farmer, besides pent-up demand over the past two-three years.

Further, the inventory position has improved drastically. The push on rural credit and irrigation schemes in two consecutive budgets has also sparked optimism in the segment.

A shift towards higher horsepower tractors was also noticed in the current year. "Sales in the year were driven by demand for higher horsepower tractors. There was high growth in the 35 HP and above segments," Mr Jain said. In fact, analysts point out that the 51 HP and above segment has seen a sizeable jump in volumes in the current year. At the same time, volumes in the 21-30 HP continues to be slack.

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