With a festival boost, the domestic tractor industry hit a historic volume level this October, but exports moderated during the month.
September was also a strong month for the industry. As the sales momentum continued in October and the festival season boosted positive sentiments further, the total domestic tractor volumes stood at 1.24 lakh units (up 7 per cent y-o-y), the highest-ever monthly sales to date.
On a month-on-month basis, the growth was 9 per cent, according to data provided by Tractor & Mechanization Association (TMA).
October was the second month that domestic tractor sales recorded a y-o-y growth after April.
“The wholesale volumes over the past two months (September and October) have grown at a healthy pace (23 per cent and 7 per cent y-o-y, respectively), with OEMs building up dealer inventory to cater to strong demand during the festival season. Retail sales during the 42-day festival period grew at a healthy pace of about 30 per cent to 77,602 units, aided by stable farm cash flows,” said rating agency ICRA.
“Festival season kept the spirits high and led to very strong momentum in demand for tractors and farm machinery,” said Hemant Sikka, President-Farm Equipment Sector, M&M. The company saw its tractor sales grow 10 per cent at 50,539 units.
Sonalika Tractors said the company clocked its highest-ever deliveries of 20,000 tractors in October with 16 per cent billing growth which is almost double the industry growth during the month. “OEMs have become aggressive in terms of discounting in this festival season with the aim of gaining market share,” said analysts at Motilal Oswal Financial Services.
Total tractor production during October stood at 86,856 units compared with 90,395 units in October 2021. For the first time in 16 months, tractor exports dropped below 10,000 units. Total exports stood at 8,888 units compared with 12,194 units in October 2021.
For April-October period, total domestic tractor sales grew 10 per cent at 610,731 units compared with 556,447 units in the year-ago period, while total exports grew 6 per cent at 79,308 units compared with 74,491 units.
“For FY23, we expect the domestic tractor industry to grow in single digit and may touch a new peak in the current fiscal. The last peak observed was in FY21 when the industry touched 9 lakh tractors,” said Bharat Madan, President-Finance, Group CFO and Corporate Head, Escorts Kubota Ltd.