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The Indian tractor industry has started FY25 on a subdued note, with April sales showing weak momentum. However, hopes for positive growth in the coming months are fuelled by optimistic predictions of a good monsoon.
Total domestic tractor sales reported a marginal drop of 3 per cent at 76,945 units in April this year compared with 79,288 units in April 2023. This April, sales were higher compared with the previous month’s (March 2024) volumes of 63,755 units.
Industry representatives and analysts attribute the subdued sales in April this year to ongoing elections, low reservoir water-levels, decreased haulage activities, and moderate rabi output.
Domestic sales
Despite the Navratri festival falling in April 2024, tractor volumes remained subdued. Southern States saw a significant double-digit decline in sales, while growth in northern States was relatively better. In parts of Maharashtra, sales remained low even during Gudipadwa due to untimely rainfall, impacting crops such as wheat and cotton, alongside stringent financing conditions. The non-agricultural tractor segment experienced a severe decline of 16-18 per cent year-on-year in key regions, according to a report by Motilal Oswal Financial Services.
Top tractor maker Mahindra & Mahindra saw almost flat volumes, selling 35,805 tractors in the domestic market in April 2024 (35,398 units). Sonalika Tractors’ sales stood at 9,649 units (9,817 units). Escorts Kubota’s domestic tractor sales also dropped marginally to 7,252 units (7,168 units).
Total tractor production was lower at 86,844 units in April 2024 (77,464 units). Exports fell marginally to 7,459 units (7,652 units).
FY25 outlook
IMD’s forecast of above-normal monsoon rains and festivals in April have helped boost rural sentiments. Terms of trade remain positive, and good cash flows from the Rabi harvest are likely to boost tractor demand in the coming months, said Hemant Sikka, President – Farm Equipment Sector, Mahindra & Mahindra.
Escorts Kubota expects the first two months of this fiscal to witness subdued demand. However, for the full year, the tractor industry is expected to perform well and may register lower mid-single-digit growth in FY25, led by predictions of near-normal monsoon this year.
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