Skip to main content

Indian Tractor Market Poised to march ahead

Though the current fiscal has witnessed slight decline in the sales of tractor  (expected to be a tad below 20 percentage annual growth trajectory notched in the recent years), the business outlook in the medium run remains positive. 

The domestic tractor industry (in volume terms) is likely to grow from the current base of about 5 lakh units to about 8.6 lakh units by 2015. BK Jha reports on growth prospects of the industry and future ready initiatives of its leading players:
 
India is the largest tractor manufacturer in the world and accounts for about one-third of the global tractor production. According to the industry estimates, the jump in volume on an annual basis in the tractor production has been to the tune of a commendable 20 percent in the recent years. Northern India accounts for over 50 per cent of market share with states like Punjab, Haryana and Uttar Pradesh enjoying significantly higher penetration levels, followed by the western region, according to an Assocham report.
 
There are clear trends to suggest that demand of tractors has been consistently going up because of increasing application of tractors for non-farm operations like infrastructure and construction projects. Moreover, transportation, haulage and better crop realization through higher minimum support prices (MSPs) clubbed with continued government support through increase in budget outlays for agri-sector and increasing farm labour costs due to scarcity of farm workers are other key growth drivers of the tractor industry.  Traditionally high and medium horse power (HP) tractors were popular. But an increased presence of small and marginal farmers with about 40 per cent area under cultivation, scarcity of farm labour and rising costs of bullock carts coupled with higher efficiency of low HP tractors are driving force for growth of low HP segment.
 
Apart from being used in farming and crop cultivation, tractors find application in activities like harvesting, canal irrigation, land reclamation, drawing water, powering agricultural implements and serves as a multiutility vehicle. All these factors have proved to be catalysts in expanding the domestic tractor market.
 
Indian tractor industry has 13 national players and scores of regional players. The industry is dominated  by Mahindra and Mahindra (M&M) with a share of about 40 per cent,  followed by Tractors and Farm Equipment (TAFE) with a share of about 23 per cent, Escorts (13 per cent), L&T-John Deere (10 per cent) and International Tractors Limited (over eight per cent).
 
Mahindra & Mahindra's Farm Equipment division is the topselling tractor company in the world with annual sales of over 150,000 units which are sold in more than 40 countries with an expansive network of over 1,000 dealers. In terms of its India-specific strategy, the company has been in the vanguard of churning out products which are suitable for small farmers in the country. It recently launched Yuvraj 215 especially for small farmers which is slated to push up its sales in the current fiscal as compared to the last year. A good monsoon is generally considered to be that vital catalyst which can result in the sudden jump in the tractor sales in the second half of the fiscal. And this year too, this trend is expected to play out on a larger scale. In fact, the initial trends suggest just that - the domestic tractor industry has clocked a 24 per cent growth in the quarter ending in September with the market leader Mahindra reporting a growth of 22.1 per cent. A tad lower vis-a-vis the figure notched in the corresponding period last year.
 
 "It will be a big surprise if we see a 25 per cent growth happening in the next five months of this fiscal," Pawan Goenka, Executive Director and president of the automotive and farm equipment sectors at Mahindra & Mahindra, said at a post-earnings interaction in Mumbai. From the industry's standpoint, cautious optimism is probably the underlying sentiment at this stage with an expectation of overall growth of 18 percent which would not be too disappointing.
 
Votes with an average with
For more updates, be socially connected with us on
WhatsApp, LinkedIn, Twitter, Instagram, Facebook & Youtube

Related Story

Agri Entrepreneurs Cell for start-ups expected to be launched soon

The Central government is in the process of setting-up a dedicated Agri Entrepreneurs Cell for start-ups and small entrepreneurs, a senior official in the government said today.

Speaking…

New Holland Agriculture’s FarmMate app enters new markets

FarmMate, the digital app specifically designed for farmers is now available in Africa and the Middle East with updated product information, agronomic advice and New Holland news tailored to the…

BANKIT plans to provide banking services in rural areas

In order to provide digital banking services in unbanked rural and remote areas of India, BANKIT targets to install 1.5 lakh micro ATMs and Aadhaar Enabled Payment System (AePS) service points at…

The website encountered an unexpected error. Please try again later.