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The Indian tractor industry has ended FY23 with some record achievements — production crossed one million units for the first time and domestic sales touched a new peak. However, exports saw a marginal drop y-o-y.
Total domestic tractor volumes grew 12 per cent to 945,311 units in FY23 compared with 842,266 units in FY22, according to the data provided by Tractor & Mechanization Association (TMA).
“We saw reasonably robust demand supported by some good drivers of demand with respect to both agriculture conditions as well as the prices for the farmers. Inflation woes, however, posed a challenge for most of the year,” Mallika Srinivasan, Chairman & Managing Director, TAFE (Tractors and Farm Equipment), told businessline.
Highest-ever
The domestic volumes of 9.45 lakh units in FY23 are the highest-ever for the industry. The previous peak was achieved in FY21 (8.99 lakh units). “The full-year growth was aided by a strong increase in wholesale volumes in Q4 FY23, with OEMs building up inventory in anticipation of healthy sales during the rabi season,” said Rohan Kanwar Gupta, Vice President & Sector Head, Corporate Ratings, ICRA.
In Q4, domestic tractor sales grew 19 per cent to 210,858 units compared with 177,608 units in Q4 FY22. In March this year, sales increased to 82,856 units (72,888 units in March 2022), while production was also higher at 83,948 units.
Mahindra & Mahindra reported a 16 per cent rise in FY23 domestic volumes to 389,531 units (337,052 units). Escorts Kubota Ltd’s domestic sales grew 9.4 per cent to 95,266 units (87,043). Sonalika Tractor’s domestic volumes grew 15 per cent to 116,000 units (101,060 units).
In FY23, the total tractor production in the country stood at 1,071,310 (9.61 lakh in FY22 and 9.65 lakh in FY21). After witnessing buoyant demand in FY22, exports moderated during FY23 and reported a marginal decline to 124,542 units compared with 128,636 units in the previous fiscal.
Weather play
Various global weather forecasting agencies are predicting an occurrence of El Nino over June-December 2023, which could materially impact monsoon precipitation and thus, dampen the industry demand this fiscal, said Gupta.
Though the IMD is yet to announce its monsoon prediction for 2023, Skymet, a private weather forecasting agency, on Monday said India is likely to get “below normal” monsoon rains in 2023. A combination of the high-base effect of FY23 and deficient monsoon precipitation may lead to moderation in the growth of tractor volumes this fiscal.
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