The Indian tractor market is becoming a strong high horsepower (HP) market, with a steady increase in the share of high HP tractors in the overall pie. Increasing purchasing capacity of farmers, growing farm consolidation with an increasing need for farm power per hectare, and rise in substitution of manual and animal labour for various farming operations continue to drive the structural shift to higher HP tractor sales.

The domestic tractor market has seen a gradual upgrade from 31-40 HP tractors to 41-50 HP tractors over the past few years. The share of 41-50 HP increased from 47per cent in FY18 to 54-55 per cent in FY23.

“With tractors as the prime mover, shortage of manpower has led to increased adoption of various kinds of farm machinery for farming activities and, hence, the need for higher HP tractors,” says Hemant Sikka, President, Farm Equipment Sector, Mahindra & Mahindra Ltd.

The 41-50 HP segment has grown at a CAGR of about 9 per cent in the past five years, while other categories grew in the range of 0.5 to 4.6 per cent In FY23, about 5.2 lakh tractors were sold in the 41-50 HP segment, while the total tractor volumes stood at 9.45 lakh units.

“Farmers are realising the benefits of mechanisation and higher productivity from increased usage of equipment, along with tractors. Additionally, the growing trend of collaborative farming, increasing commercial usage, and higher irrigation intensity has boosted usage of higher HP tractors,” said Hemal Thakkar, Senior Practice Leader-Consulting, CRISIL Market Intelligence & Analytics.

versatility

Also, tractors are finding applications in mining, construction, and haulage activities, highlighting their versatility. “Currently, non-farm usage constitutes about 30 per cent of the overall tractor demand, and this is anticipated to rise further, driving an upward trajectory in tractor demand,” says a report of CareEdge.

In view of the shift towards high HP products, companies such as VST Tillers & Tractors, a strong player in small farm equipment sector, are also lining up new products in the high HP segments. At least three new high HP products from VST are to hit the market shortly.

Escorts Kubota is also preparing to launch a new World Maxx series in Farmtrac to reposition itself in the 50 HP and above-premium segment.

TREM-IV emission norms came into effect in January 2023 in higher HP (more than 50 HP) tractors. This could have also caused a shift in the HP-wise mix, with the 41-50 HP segment gaining at the expense of the above-50 HP segment.

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