When we look at tractor sales in July 2020, it is evident that Covid-19 has impacted urban areas more, as compared to rural areas
While most auto segments including two-wheelers and passenger vehicles have registered negative YoY growth in July, tractor sales have managed to stay buoyant. Across the country, a total of 76,197 tractors were sold in July 2020. YoY sales have improved by 37.2% in comparison to 55,522 units sold in the corresponding period last year.
Uttar Pradesh leads in tractor sales
Uttar Pradesh was at number one position with 13,383 units sold in July. As compared to 10,192 units sold in July last year, YoY sales have improved by 31.3%. Gujarat comes second with 11,704 units sold in July. YoY sales are up 31.4%, as compared to 8,909 units sold in July last year. Next is Rajasthan with 11,406 tractors sold in July. YoY sales have improved by 40.4%, as compared to 8,122 units sold in the corresponding period last year.
Maharashtra takes the fourth spot with 8,988 units sold in July. YoY sales have more than doubled, registering a growth of 120.7%. This is the highest percentage growth among all states. Maharashtra tractor sales in July last year was 4,073 units. At fifth place is Bihar with 5,260 units sold in July. YoY sales are up by a whopping 60%, as compared to 3,287 units sold in July last year.
Other states in top ten list include Haryana (4,842 units), Karnataka (4,209), Chhattisgarh (3,545), Punjab (2,910), and Tamil Nadu (2,879). With the exception of Chhattisgarh, all other states in top ten have registered positive YoY growth.
Overall, a total of nine states have negative YoY growth in July 2020. States with single digit tractor sales include Goa, Puducherry, Dadra & Nagar Haveli, Tripura, Meghalaya and Mizoram. States with zero tractor sales include Delhi, Chandigarh, Ladakh, Manipur, Nagaland and Sikkim.
Reasons for increased tractor sales
According to experts, there are multiple reasons for increased tractor sales in July 2020. Key among them is the early arrival of monsoon this year and its rapid spread across the country. Another key factor is that the country had received adequate rainfall last year as well. This has increased cash flow in rural areas. Factors like loan waivers for farmers, easy farm loans and higher MSP (minimum support price) for various crops could have also led to positive consumer sentiments in rural areas.
Talking about specific states such as UP and Bihar, it is possible that return of migrants from cities to their villages may have boosted tractor sales. With no other source of income, many migrants may have taken up agricultural activities.
Something similar may have happened in Maharashtra, where local migrants may have returned back to their villages due to Covid-19 pandemic. In the times of coronavirus, farming in sparsely populated villages does come across as a lot safer in comparison to doing odd jobs in crowded cities.
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