Monday, May 2, 2005
Tractor sector sales surge 30%
S Kalyana Ramanathan / New Delhi May 2, 2005
Tractor sales, including exports, recorded a 30 per cent growth in 2004-05 at 249,000 units, the highest in last five years, against 191,000 units in 2003-04.
Exports during the year recorded an impressive 27 per cent. In terms of domestic sales, India is the single largest market in the world for tractors.
The Tractor Manufacturers Association (TMA) has forecast a growth of 7-10 per cent for the current financial year, with total sales expected to touch 270,000 units.
According to R C Jain, president, TMA, demand during 2004-05 received a strong push owing to a good monsoon in the previous year and also good support from banks that were willing to lend at lower interest rate and margin money.
An industry observer said while traditional lenders such as nationalised and land development banks continued to lend with greater enthusiasm, new lenders from the private sector too participated in the market.
Given the lower default rates in the farming sector in terms of loan repayment and the robust growth, thanks to a lower base from 2003-04, new lenders saw a big opportunity in the tractor market. Average lending rate today stands at 10 per cent, which was a 1-2 per cent lower than the previous year.
The highlight performance came from the Chennai-based Tractor and Farm Equipment (Tafe), which moved to the number two position with a 14 per cent market share, ousting Punjab Tractor, which was number two in 2003-04.
Market leader Mahindra & Mahindra, retained its position with a share of 26.5 per cent, a gain of 1.5 per cent share over the previous year ‘s share of 25 per cent. Escorts Ltd continued to be the fourth largest tractor producer in country, with a market share of 12.8 per cent, equal to the share in 2003-04.
The mid-size segment comprising the 30-40 HP range continued to rule with a 60 per cent market share. The sub-30 HP market had a 17 per cent market share and the balance 23 per cent was in the 40 HP and above market.
The last financial year also saw the industry undertaking some internal corrections in terms of stock pile up. “Earlier the dealer used to carry stock of even two to three months sales, leading to lot of distortion in the actual demand. Now the industry has consciously moved away from the practice and has managed to maintain an average stock of not more than 45 days,” said an industry source.
In terms of region, Tamil Nadu recorded the highest growth with a 100 per cent jump in volumes during 2004-05, followed by Karnataka (87 per cent), Gujarat (69 per cent), Maharashtra (66 per cent), Orissa (62 per cent) and Andhra Pradesh (58 per cent).