Domestic tractor sales reported a double-digit decline (year-on-year) for the second straight month in January due to weak agricultural activities.
Total domestic tractor sales stood at 55,589 units in January 2024 compared with 65,635 units in January 2023, a decline of 15 per cent, according to the data provided by the Tractor & Mechanisation Association (TMA).
The decline was due to tapering of agriculture activities led by a delayed harvesting season and lower rabi sowing, said analysts at Kotak Institutional Equities.
Top tractor maker Mahindra & Mahindra reported a 17 per cent decline at 22,972 units in January 2024, while Escorts Kubota’s domestic tractor fell by 7 per cent at 5,817 units.
However, January volumes recorded an increase month-on-month basis. January 2024 sales were higher compared with December 2023 volumes of 44,735 units.
“Tractor sales saw a positive uptick in January 2024 after a slowdown in previous months, likely driven by anticipation of a good rabi crop output and favourable weather conditions for wheat cultivation,” said the Federation of Automobile Dealers Associations (FADA).
Demand to increase
Hemant Sikka, President – Farm Equipment Sector, Mahindra & Mahindra Ltd said rabi crop output is expected to be good with prevailing cold conditions helping the key crop of wheat. Government announcement of a good estimate of horticulture production, and continued government support to boost rural economy will aid positive sentiments and support tractor demand in the coming months.
In January 2024, the total tractor production stood at 74,795 units compared with 90,633 units in January 2023 and 41,014 units in December 2023.
Tractor exports continue to be subdued and total shipments stood at 7,185 units last month compared with 7,764 units in January 2022 and 7,391 units in December 2023.
For the April 2023-January 2024 period, total domestic tractor sales stood at 7.6 lakh units compared with 8 lakh units in the same period previous fiscal.
Escorts Kubota expects the domestic tractor industry to degrow at 6-7 pr cent compared with the record industry volume of FY2023 due to the impact of the high base of FY23 and erratic rainfall, mainly in the western and southern parts of the country,” the company management told during its Q3FY24 earnings call.