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Domestic tractor sales in August were the lowest monthly number in 2023. Tractor volumes grew marginally year-on-year but down month-on-month basis. Production hit an 11-month high last month, while exports continued to improve on a monthly basis.
Total domestic tractor volumes stood at 53,249 units in August 2023 when compared with 52,691 units in August 2022 due to deficient monsoon, which impacted the demand.
However, last month’s volumes were down 9 per cent when compared with July 2023’s volumes of 58,583 units, according to data from the Tractor & Mechanization Association.
Top tractor maker Mahindra & Mahindra Ltd reported a 3 per cent increase in its August 2023 volumes at 20,647 units, while Escorts Kubota reported a decline of 2 per cent at 5,198 units.
Deficient monsoon
While there has been positive momentum in some markets due to government subsidy programmes, the deficient monsoon in other regions during August coupled with the shifting of the key festive season to the third quarter of this fiscal impacted tractor sales in August, according to Escorts Kubota.
Total production stood at 94,125 units in August when compared with 89,196 units in July 2023 and 98,745 units in August 2022.
Tractor production in August hit an 11-month high as the industry expects the tractor wholesale to pick in this festive season as overall kharif sowing is on track.
Market conditions
Market conditions remain favourable for the rural farmers with inputs inflation cooling off and crop prices holding firm. While other macroeconomic factors remain intact, if monsoon catches up in September in regions that witnessed deficiency, tractor demand may witness a good pick up in the upcoming festive months, according to tractor makers.
Meanwhile, Escorts Kubota announced that it would be increasing the prices of its tractors effective September 16, 2023 onwards. The reason for the price hike was not disclosed.
The tractor exports increased to 8,874 units in August when compared with 8,460 units in July 2023. However, exports were significantly lower when compared with 12,118 units in August 2022.
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