The Indian passenger car industry may be reeling under a prolonged demand slump, but in the farms out there, things have never been better. Thanks to a good monsoon last year that resulted in a bumper crop yield, sales of tractors grew by 20% in 201314 to hit an all-time high of 633,656 units during the year.
Tractors offered the only ray of hope for the beleaguered automotive industry as passenger car sales slumped by 6%, a second straight annual decline, while commercial vehicles — considered to be the barometer of the economy — was the worst hit with a 20% decline in sales to 632,000 units in the fiscal year that ended on March 31.
“The good monsoon last year and robust rural economy has helped tractor sales,” said Pawan Goenka, executive director and president, Mahindra and Mahindra. “Increasing mechanisation in the farm sector is a perpetual trend. What has also helped is the shortage of manpower in farms as farmers buy tractors to offset that.”
The outlook for the industry this fiscal however is not as optimistic. With below average rainfall predicted for 2014-15, sales are expected to grow 8-10%.