In this episode of the State of the Economy podcast, businessline’s S Ronendra Singh discusses the tractor market in India with Gaurav Saxena, Director & CEO - International Business at International Tractors Limited.
In September, the retail sales of tractors in the domestic market experienced a 10% year-on-year decline to 54,492 units, compared to 60,321 units in September 2022. However, the market displayed 14 per cent year-on-year growth in the first half of the current fiscal year, reaching 444,340 units, up from 389,850 units during the same April-September period in the previous year. Despite the recent slowdown, tractor sales have contributed to the overall growth of the Indian automobile industry.
This performance not only signals strong market demand but also fosters a positive sentiment in the domestic tractor market, especially during the festive season. In contrast, export markets have witnessed declining sales over the last six months of the current fiscal year, with companies like Mahindra and Mahindra and Escorts Kubota facing a 35% year-on-year drop in sales.
International Tractors Limited, based in Hoshiarpur, has emerged as the top exporter, shipping 17,004 units during the April-September period. The company aims to double its exports in the coming years, targeting 1 lakh units by 2030. It also aspires to become the number one tractor company in 25 countries by the same year.
Regarding the domestic market, key regions such as Bihar, Madhya Pradesh, Chhattisgarh, and Maharashtra are experiencing growth, while Andhra Pradesh, Karnataka, and Tamil Nadu are becoming focus markets. The 60-260 HP segment dominates the Indian market, while exports see demand for below 30 HP and above 60 HP tractors.
As for developed markets, the USA is the largest market for tractors outside India, with other countries in Western Europe, Latin America, and South Africa also becoming focus areas.
The podcast also touches on future trends, such as autonomous tractors, which are in their early stages, and alternative fuels, including biofuels. The impact of rising raw material and parts costs on the tractor industry is discussed, with a focus on the recent drop in commodity prices and logistics costs.
The overall outlook for the tractor market in India and exports is positive, with an expected growth of 15% to 20% next year, provided global conflicts do not disrupt the industry.
(Host: S Ronendra Singh, Producers: V Nivedita, Nabodita Ganguly)
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About the State of the Economy podcast
India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups.