Date:31/03/2006 URL: http://www.thehindubusinessline.com/2006/03/31/stories/2006033104010200.htm

Back South drives tractor sales to new peak

Neha Kaushik

To clock 2.85 lakh units this fiscal, a rise of 15%

Growth drivers
Good monsoons, higher crop prices, lower interest rates have been the contributing factors

New Delhi , March 30

Tractor sales are set to clock an all time high this fiscal. In fact, the industry will be closing at about 285,000 units, significantly more than the previous all time high of 269,000 units in 1999-2000.

This also represents a growth of around 15 per cent over the previous fiscal's sales of 247,000 units.

According to Mr R.C. Jain, President, Tractor Manufacturers Association (TMA), "The sales have been high this year primarily on account of the excellent monsoons in the last year. In addition, the returns from the crop have been very good and interest rates have also gone down this year."

South does well

The southern States in particular have done extremely well this year. Karnataka, for instance, has seen a 68 per cent growth in sales, whiles sales in Tamil Nadu and Andhra Pradesh have grown by 49 per cent and 24 per cent respectively. Maharashtra and Gujarat too have seen excellent growth this fiscal with tractor sales growing by 52 per cent and 36 per cent respectively.

Traditional tractor strong-belts such as Madhya Pradesh and Uttar Pradesh have however taken a beating this year with sales dipping. While tractors sales in Madhya Pradesh declined by 16 per cent, sales in Uttar Pradesh dipped by two per cent.

"States such as Uttar Pradesh and Madhya Pradesh have become saturated. Meanwhile, growth in the southern States have been driven primarily by the increased availability of financing as well as widespread monsoons last year," Mr Jain said.

Exports

Exports have also emerged as a major growth driver this fiscal with a growth of over 50 per cent. In fact, the total exports, this fiscal, are estimated at about 31,000 units compared with 20,400 units in the previous fiscal. John Deere was the largest exporter at about 10,000 units with companies such as Mahindra & Mahindra, TAFE, Sonalika and New Holland also seeing a significant increase in export volumes in the period.

The year also saw a growing shift towards high horse power tractors. While 21-30 HP tractors accounted for 22.6 per cent of sales in 2003-04, the figure has dipped to 19 per cent this year.

On the other hand, the share of tractors in the 41-50 HP and over 60 HP segments has increased by two per cent and one per cent respectively in the period.