Tractor sales soar in June thanks to pent-up demand and a robust rural economy

Domestic tractor sales hit a record high in June, helped by pent-up demand after the lockdown eased and a robust rural economy.

Last month, total domestic tractor sales amounted to 1,10,399 units compared to 92,888 units in June 2020 and 63,313 units in May 2021.

Strong recovery

“Sales of 1 lakh tractors in a single month are testament to the strong recovery seen in the rural market as Covid-19 restrictions ease and farmers prepare for Kharif’s crop cycle,” said said Hemant Sikka, President of Agricultural Equipment Sector, Mahindra & Mahindra.

Total tractor sales for June 2021 were the third highest monthly figure in the past 28 months. In October 2020, the total sales of tractors in the domestic market amounted to 115,155 units, while in October 2018, the monthly sales of tractors amounted to 112,556 units.

Despite the slowdown in sales in May due to foreclosure restrictions, total domestic tractor volumes rose 39% to 2.29 lakh units for the first quarter of this fiscal year, from 1.65 lakh units during the period. April-June 2020.

With over 10,000 tractor shipments in June, India’s total tractor exports more than doubled to 26,660 units in the first quarter of this fiscal year, from 10,808 units in the previous year quarter.

Mahindra & Mahindra reported 48% volume growth in the first quarter to 95,848 units, compared to 64,577 units in the previous year quarter. “We remain optimistic about the development of the monsoon and the demand for tractors in the coming months,” Sikka said.

Production increases

Total tractor production in the country was around 2.49 lakh units in the period April-June 2021, compared to 1.12 lakh units in the quarter of last year, reflecting the best capacities. of tractor manufacturers to manage their supply chain and manufacturing capabilities by beating Covid-19 blues and other associated challenges.

Tractor manufacturers and analysts expect demand to remain robust amid the threat of a third wave of the pandemic. They hope the government’s vaccination campaign will help prevent the third wave further, allowing the cogs of the economy to keep spinning.

“We expect demand to improve in the tractor segment through resilient rural incomes due to higher income visibility due to better farm income outlook (higher MSP, better yield) and an income effect induced by spending on rural infrastructure, ”said one analyst. at ICICI Securities.

In fiscal year 21, the tractor industry grew by 27 percent. It is expected to maintain momentum with moderate growth of 5-10% (due to a high base effect) aided by a normal monsoon, healthy agricultural production and increased public spending on development activities.

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