Companies

Tractor firms plough on to record output in Sept

G Balachandar Chennai | Updated on October 13, 2020 Published on October 13, 2020

The industry is bullish on the upcoming festival season

Rural prosperity gives demand push; stockpiling by OEMs sends sales soaring

The tractor industry had a field day in September, with production hitting a historic high and second highest-ever sales by volume.

Total tractor production stood at 99,523 units during the month, supported by demand improvement and inventory build-up by companies ahead of the festival season. The previous highest production was 92,422 units in October 2018.

Total domestic sales in September stood at 108,585 units, up 28 per cent compared with 84,726 units in September 2019. In October 2018, the industry had sold the highest number of units (1,12,556).

Demand outpaces supply

For the half-year ended September 30, total domestic tractor sales were 402,607 units, a growth of 13 per cent, compared with 357,652 units in the same period last year, according to data from Tractor and Mechanisation Association.

“Rural prosperity has been driving the demand for tractors. Demand is better from first-time buyers and for higher HP categories. South and West regions are outpacing North and East.

“The demand has been stronger than supply. OEMs are working towards ramping up production, and most companies are working at over 80 per cent utilisation,” sector analysts at Emkay Global Financial Services said.

Production ramp-up has been better for TAFE and International Tractors, resulting in market share gains. Also, banks and NBFCs have been aggressive in providing finance, they added.

During July-September 2020, total tractor sales stood at 237,451 units, significantly higher compared with 165,156 units in Q1 of the current fiscal and 167,347 units in Q2 of the previous fiscal.

Strong rural economy

With strong rural economy, robust tractor demand and inventory build-up by OEMs, October may turn out to be a yet another historic month for the tractor industry.

“We are buoyant about the upcoming festival season and expect the farmers’ sentiments to remain positive,” said Raman Mittal, Executive Director, Sonalika Group.

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Published on October 13, 2020
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