Led by Diwali, which begins with Dhanteras later this month, producers anticipate gross sales momentum to return within the present month. Advancing for 4 straight years from FY20, tractor gross sales in India ended FY23 with a document 944,000 models, up 12% YoY.
Home tractor gross sales in October dropped 5% to 1,17,714 models from 1,23,526 models in the identical interval a yr in the past, in response to information from Tractor Junction, an internet aggregator for tractor and farm tools.
September-November is the height interval for tractor gross sales as farmers harvest their kharif (post-monsoon) crops, whereas making ready to sow for the following season. If the kharif crop output and costs are good, they might be inspired to put money into tractors for the approaching rabi planting season.
Nonetheless, the nation’s rice manufacturing – which is the primary kharif crop – is estimated to drop 3.79% to 106.31 million tonnes within the kharif season of the 2023-24 July-June crop yr because of poor rainfall in key rising states, in response to the agriculture ministry’s newest estimates.
“The agricultural demand is a operating concern. The federal government’s projection of the decrease kharif crop (rice) output solely mounts the considerations. The decline in tractor gross sales for the final two months and year-to-month is a sign of stress. I don’t see the state of affairs in rural India bettering until one thing dramatic occurs within the subsequent couple of months,” stated Madan Sabnavis, chief economist at Financial institution of Baroda.Tractor volumes on the earth’s largest marketplace for such farm autos additionally dropped 7% year-to-month from to six,44,555 models from 690063 models within the corresponding interval. Nonetheless, Amrit Sagar Mittal, president Tractor Producers Affiliation, shouldn’t be fearful. “All the basics that drive tractor gross sales are very a lot in place. We anticipate November to be a lot better.”Mittal expects home tractor gross sales to finish FY24 with a 5% development YoY. The final quarter of the yr will make up for the decline within the final two months’ gross sales. Amongst different elements, the agency commodity costs will likely be a key issue, he stated.
Hemant Sikka, president, farm tools sector at tractor market chief Mahindra & Mahindra, shared his optimism. “Larger mixture kharif manufacturing, greater minimal help worth for key Rabi crops and authorities’s continued help to the agri financial system within the second half of this yr are resulting in constructive sentiments amongst farmers through the on-going festive season, supporting tractor demand.”
Rajat Gupta, founder Tractor Junction attributed the decline to elements like uneven rain and money circulation fluctuations and the excessive base of the earlier yr. “That is solely a brief problem for the trade and with upcoming festivals in November and powerful demand seen on our platform, we anticipate a 7-10% trade development within the present month.”
Excluding Tafe Group, which noticed a 2% year-on-year development in October, gross sales at remainder of the producers together with Mahindra & Mahindra, Worldwide Tractors Ltd, Escorts Kubota, John Deere fell in low single digits from the yr in the past interval.