Domestic tractor sales hit an 8-month high this June, while production touched a 9-month peak during the month amid mixed farm sentiments due to the late onset of monsoon.

However, for the Q1 of this fiscal, domestic sales fell marginally, while production and exports reported a higher decline when compared with the year-ago period.

This June, tractor sales grew both month-on-month and year-on-year. 

Total domestic tractor volumes increased by 18 per cent at 98,422 units in June 2023 compared to 83,267 units in May 2023. But the growth was 4 per cent compared with June 2022 volumes of 94,477 units, according to  Tractor & Mechanization Association data.

The June 2023 volume of 98,422 units was the highest monthly number since October 2022.

Escorts Kubota’s June 2023 sales were flat year-on-year at 9,270 units (9,265 units in June 2022). However, volumes were much higher when compared with 8,704 units in May 2023.

“Overall sentiments were mixed as markets with good rainfall and crop prices showed good momentum, and markets with a delayed monsoon had a slightly dampened demand, the company said, adding, “we expect the demand momentum to improve in coming months.”

Top tractor maker Mahindra & Mahindra reported a 9 per cent year-on-year increase in June 2023 volumes at 43,364 units. Also, it is 30 per cent higher when compared with the company’s May 2023 sales of 33,113 units.

“Government support with an increase in MSP for all Kharif crops, and improving terms of trade for farmers are positive factors that are expected to support tractor demand going forward,” said Hemant Sikka, President - of Farm Equipment Sector, Mahindra & Mahindra Ltd.

Total tractor production last month was 92,266 units compared with 103,563 units in June 2022 and 79,928 units in May 2023. June 2023 production was the highest monthly number since September 2022.

For the first quarter of this fiscal, total tractor sales reported a marginal decline at 260,977 units compared with 265,618 units in Q1 of FY23. Production reported a 9 per cent decline at 259,038 units (284,320 units), while exports fell 31 per cent at 24,206 units (35,146 units).

“The wholesales in March 2023 had been aided by a preponement of the festive season; even as retail sales towards the end of the fiscal remained healthy, wholesale volumes in April 2023 saw a decline (4%) sequentially. Post the decline in April, wholesale volumes in May and June remained largely similar to the previous fiscal, with industry demand remaining steady, said Rohan Kanwar Gupta, Vice President & Sector Head, Corporate Ratings, Icra.

“Even as there were fears regarding the impact of unseasonal rainfall on crop yield, rabi cash flows remained relatively healthy and provided optimism regarding the continuation of steady industry volumes, going forward. The temporal and spatial distribution of the monsoon remains monitorable and would be the key to help maintain healthy industry volumes,” he added.

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