Even as most sectors in the domestic automotive industry reel under the ongoing economic downturn, tractors are running a hot race: in the first three months this fiscal, sales have galloped 23%, giving the first indication of the optimisim built by a good monsoon.
Last year, tractor sales dipped by 2% due to erratic monsoons and a sluggish economy. The uptick in demand this year highlights increased activity in the farming sector, raising hopes that a good harvest may spur demand in other sectors as well.
Market leader Mahindra and Mahindra saw sales grow by 26% to over 71,000 units in the domestic market in April-June. Encouraged by this, it has revised its full-year growth estimates up to 10-12%, from the 5-7% it forecast when the year began.
“There is a definite turnaround in the tractor segment,” said Pawan Goenka, president (automotive and farm equipment sector) M&M. “The monsoons have been good... at the start of the year we were not very optimistic, but demand has exceeded our expectations. There is optimisim across states, that augers well for the coming festive season.”
The tractor turnaround has buoyed other segments. The commercial vehicle industry, where sales have been sinking for 16 months now, is hopeful of a similar story.
“The good onset of monsoons is encouraging,” said V Sumantran, vice-chairman, Ashok Leyland. “Better rains means better activity in the farms, more money in the hands of the farmers and better consumer sentiment. It also means better crops and more freight, that translates into more vehicles to haul that freight.”