Tractor segment continues to post good sales growth in India
With a number of favourable factors working to its advantage, the tractor segment has registered YoY growth of 27.80% in August 2020. A total of 67,406 units were sold in August 2020, as compared to 52,744 units in August last year. The tractor segment had returned positive results in July as well, registering YoY gain of 37.24%.
As per vehicle registration data published by the Federation of Automobile Dealers Associations (FADA), only the tractor segment has registered positive YoY growth in August 2020. The situation was the same in July 2020 as well.
Mahindra & Mahindra leads
Top performer in tractor segment in August 2020 is Mahindra & Mahindra with sales of 16,328 units. The company has registered positive YoY growth, as compared to 12,462 units sold in August last year. Market share is also up from 23.63% to 24.22%. At number two is Mahindra Swaraj with 10,536 units sold in August 2020. YoY sales are positive, as compared to 7,742 units sold in August last year. The company’s market share has improved from 14.68% to 15.63%.
At number three in the list is International Tractors with 8,577 units sold in August 2020. International Tractor Limited is part of Sonalika Group. YoY sales are positive, as compared to 6,384 units sold in August last year. Market share has gone up from 12.10% to 12.72%. At number four is TAFE Limited with 7,675 units sold in August 2020. This is positive YoY growth, as compared to 6,483 units sold in August last year. However, TAFE’s market share has dropped from 12.29% to 11.39%.
Escorts Limited takes the fifth spot with 6,943 units sold in August 2020. Sales during the corresponding period last year stood at 5,556 units. The company’s market share has eroded slightly from 10.53% to 10.30%.
Other tractor OEMs in top ten list include Eicher Tractors, John Deere, CNH Industrial, Kubota Agriculture, and VST Tillers. All these OEMs have higher sales in August 2020, as compared to August last year.
FADA insights on tractor segment
One of the key factors that have boosted tractor sales is the bountiful monsoon rains across the country. In India, the ‘kharif’ crops are dependent on monsoon rains in large parts of the country. With good monsoon, it becomes possible for farmers to bring more land under cultivation. As per government estimates, kharif sowing area has increased by around 10 percent this season. As there’s more land to be tilled, it has naturally resulted in increased tractor sales.
Another key reason is the favourable policies announced by the government. More funds have been allocated for agriculture and rural development, which in turn has increased cash flow in rural areas. Special schemes such as low-interest loans and higher minimum support price (MSP) for various crops have also helped boost cash availability with farmers.