The tractor industry in India continues to see a softening of demand on the back of not only a high base but also weakening of rural sentiments.
In fact, a closer look at the data of the top tractor manufacturers for February showcases that the overall industry clocked a degrowth of 16 percent, with sales coming at 50,352 units versus 60,161 units last year.
In terms of YTD (fiscal year-to-date) the consolidated wholesales has dropped 5 percent, with a total of 790,561 tractors sold in the country this year, versus 830,400 tractors sold last year. The overall industry has been witnessing a slowdown for the last few months. October continued to see the highest sales with 116,379 units sold across the 6 leading tractor makers.
| Feb ’24 | Feb ’23 | Change (in units) | Change (in %) | YTD (FY ’24) | YTD (FY ’23) | Change (in units) | Change (in %) | |
| Mahindra | 20,121 | 24,619 | -4,498 | -18% | 340,250 | 355,909 | -15,659 | -4% |
| TAFE | 8,455 | 11,233 | -2,778 | -25% | 146,641 | 156,157 | -9,516 | -6% |
| Sonalika | 6,911 | 6,994 | -83 | -1% | 106,684 | 105,384 | 1,300 | 1% |
| Escorts | 6,041 | 7,245 | -1,204 | -17% | 82,185 | 86,129 | -3,944 | -5% |
| John Deere | 5,037 | 5,761 | -724 | -13% | 65,909 | 76,273 | -10,364 | -14% |
| New Holland | 2,559 | 2,556 | 3 | 0% | 31,639 | 31,660 | -21 | 0% |
| Kubota | 1,228 | 1,753 | -525 | -30% | 17,253 | 23,170 | -5,917 | -26% |
| Total | 50,352 | 60,161 | -9,809 | -16% | 790,561 | 834,682 | -44,121 | -5% |
Coming to company-wise performance market leader Mahindra sold 20,121 tractors in February, which was 18 percent lower YoY. For YTD, the sales decline by 4 percent at 340,250 units.
Hemant Sikka, President – Farm Equipment Sector, Mahindra & Mahindra attributed the slowdown to the southern and western states facing agri stress due to erratic and deficient monsoon. “However, Rabi crop outlook is very good, with wheat crop likely to be a bumper crop. Harvesting has started in few states with the government supporting early procurement of wheat crop. Continued government support through various rural schemes and enhanced institutional credit will further help boost tractor demand going forward.”
TAFE posted sales of 8,455 units for February which was 25 percent lower YoY, and for YTD the sales were lower by 6 percent at 146,641 units.
Sonalika reported almost a flattish decline with 6,911 tractors sold last month. The YTD sales was in the positive with 106,684 units.
Raman Mittal, Joint MD, International Tractors said, “We feel happy to have delivered on dynamic Indian agri ecosystem needs for tractors and clocked our highest-ever February market share of 16.1% along with highest market share gain in the industry.”
Escorts reported wholesales of 6,041 tractors, which was 17 percent lower compared to February 2023. In YTD terms the company sold 82,185 tractors, down 5 percent YoY. The company attributed the decline to the continuing impact of uneven monsoon coupled with insufficient rainfall and diminished reservoir levels which impacted the Kharif output. It Anticipates improvements in the Rabi harvest and early signs of a normal monsoon next year are projected to enhance overall sentiments and drive an uptick in tractor sales in the next fiscal year.
Tractor sales in FY2024 (April 2023 – February 2024)
A recent report released by Kotak Institutional Equities estimates that the domestic tractor industry volumes YoY decline was owing to the tapering of agriculture activities led by: weakness in southern and western markets due to diminished kharif output and lower rabi sowing. However, improved rabi sowing and a normal monsoon forecast for next year should support demand recovery in the coming months.
