Tractor industry likely to post 16%-18% sales growth

  • According to the report by CRISIL Research, domestic tractor sales are expected to close fiscal 2017 with impressive 16%-18% growth, riding a monsoon-led surge in demand that was enough to offset the impact of demonetization in the latter half.
  • October saw a record 44% spurt, lifting sales for the April-October period by a whopping 26%.
  • The fervor could well have continued, going by the inventory with distributors, but for the demonetization move. Transactions in the rural areas, which account for the bulk of domestic tractor sales, are largely cash-based. With cash drying up, sales took a beating – with de-growth of 13% in November, and a modest growth of 7% in December and 5% in January.
  • Maharashtra, Madhya Pradesh, and Uttar Pradesh are expected to drive demand. Growth in the peninsular region would be driven by Andhra Pradesh and Telangana, though Karnataka and Tamil Nadu could experience stress for a while, the overall region should perform well, given normal monsoons and consistent pace of rural development activities.
  • Moreover, Tractor sales too rose 16% against an all-India increase of 13%. Incidentally, UP is the largest market for motorcycles and tractors in India and accounts for 15% of the total sales volumes.
  • We do quantitative market research by using trade journals, directories, libraries, websites, publications of trade association and chamber of commerce, government publications, and internal sources.

Source:

  • www.ibef.org
  • www.economictimes.indiatimes.com