Domestic tractor volumes recorded their worst monthly fall in December in nearly 24 months. Manufacturers attribute this to partial damage to crops from unseasonal rains, late kharif harvesting and costlier loans.
Analysts at Icra observed that monsoon precipitation remained weak overall, adding that the temporal and spatial distribution of rains was uneven. “The subpar monsoon has led to a marginal moderation in volumes over the past few months, with concerns emerging regarding the impact of the uneven precipitation on rural cash flows,” they said.
According to data shared by the Tractor and Mechanisation Association (TMA), 915,258 tractors were sold in 2023 as compared to 912,061 units in 2022.
A senior executive from a top manufacturer told FE the high base effect of 2022 also played a part in the subdued volumes of 2023. “However, we are not expecting a further decline beyond this,” the executive said.
Mahindra & Mahindra group, with a share of 41% of the domestic tractor market, saw its December sales slide by 17%. Escorts Kubota, the country’s fourth largest tractor maker, also posted a 17% decline in volumes during the same month.