According to the Tractors Manufacturers Association of India (TMAI), better availability of credit and focus on retail tractor financing saw the volume growth at 29% in 2004-05 and 18% in 2005-06.
In Q1, all players with the exception of John Deere and HMT registered an increase in sales. While Escorts almost doubled its growth to 11,876 vehicles, Tafe and M&M saw volumes rise by 42.7% and 29% respectively. During the period, Tafe increased its market share to 23.01% from 20.79% a year ago, while M&M retained its leadership position with a 31.69% share.
The domestic tractor industry expects a repeat performance in the coming quarter too. "The outlook is promising with the monsoons being fairly normal," said Mallika Srinivasan, CEO of Tractors and Farm Equipment Ltd (Tafe). In the first quarter of 2006-07, with a decent monsoon, according to estimates so far, and therefore projection of better crop, the industry is planning to expand its production from the 2.96 lakh units in 2005-06. According to data collated by the Confederation of Indian Industry, six of the eleven companies selling tractors in the market are planning to expand their facilities or upgrade them entailing a total capital expenditure of Rs 1,067 crore. Things are very bright and we are hoping a bumper crop will boost sales,said LD Mittal, chairman of International Tractors Ltd.