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Domestic tractor sales witnessed a very marginal increase in 2023, while tractor exports reported a double-digit decline. Total tractor production dropped below one million units after clocking more than a million units for two consecutive years.
During 2023, tractor demand was steady, despite uneven monsoon and associated challenges. Total tractor sales in the domestic market stood at 9.15 lakh units in 2023, when compared to 9.12 lakh units in 2022, according to data provided by the Tractor & Mechanisation Association (TMA).
“Tractor industry volumes have remained largely steady during the years, even as concerns have emerged on the impact of a sub-par and uneven monsoon on rural cash flows and demand. Post healthy demand trends in H1 CY23, there has been some moderation in demand over the past few months, led by the uneven precipitation,” said Rohan Kanwar Gupta, Vice-President & Sector Head, Corporate Ratings, ICRA.
Total tractor production was lower at 9.86 lakh units in 2023, when compared to 1 lakh units in 2022, and 1.06 lakh units in 2021, the highest-ever annual production.
The calendar year 2023 proved to be a subdued period for exports. Total shipments of ‘made in India’ tractors fell 27 per cent at 96,223 units in 2023, when compared to 131,850 units in 2022.
Recession woes
Escorts’ management had said that its Europe region, which is a major market for the company, was under recessionary conditions. As a result, demand was poor, thereby impacting its exports.
For December 2023, total tractor production and domestic sales fell steeply. Domestic tractor sales stood at 44,735 units, when compared to 72,266 units in November 2023 and 55,782 units in December 2022.
Retail momentum slowed down on account of the tapering of agricultural activities, which is the norm in December, according to Hemant Sikka, President, Farm Equipment Sector, Mahindra & Mahindra Ltd.
Last month’s tractor production was the lowest since May 2020. Also, domestic tractor sales were the lowest in the past two years.
Escorts Kubota said rural sentiments were impacted in December 2023 due to delay in crop harvest and lower rabi sowing, thus affecting both retail and wholesales.
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