Team News Riveting
Healthy farm cash flows in the rural economy and monsoon progress have aided robust growth in tractor sales.
The ICRA Research estimates Industry volumes to grow between 7 and 9 per cent in the current fiscal. The agency had earlier forecasted 2 to 4 per cent growth in domestic tractor volumes in Financial Year 2021, led by uncertainty regarding the impact of the pandemic on the farming community.
While uncertainty continues to exist in relation to pandemic, farm sentiments are expected to remain healthy because of farm cash flows across regions coupled with stable crop prices supported by enhancement of government focus on procurement.
The healthy monsoon precipitation across regions till date and favourable kharif crop outlook, supported by early sowing, seasonally high reservoir levels and adequate labour availability and Government support programmes (including direct benefit transfers) had also stimulated the sector.
Besides, adequate financing availability has also been supportive.
The lockdown measures undertaken in view of the Covid-19 pandemic, had hampered tractor industry volumes significantly in March 2020 and April 2020.
However, aided by healthy rabi cash flows across regions and progress of monsoon (in line with forecasts), there has been a sequential improvement in tractor sales ever since. In August 2020, the industry is estimated to have recorded -72 per cent growth in wholesale volumes and -27 per cent growth in retail volumes on a Year-on-Year basis.
The manufacturers were ramping up production levels ahead of the festive season and are gearing up for healthy sales for the rest of the year.
