Domestic tractor sales reach 8-month high in June amid mixed farm sentiments
Domestic tractor sales hit an 8-month high in June, while production touched a 9-month high during the month amid mixed farming sentiment due to the late onset of the monsoon.
However, for the first quarter of this fiscal year, domestic sales declined slightly, while production and exports recorded a higher decline compared to the same period last year.
In June, tractor sales grew both month-on-month and year-over-year.
Total domestic tractor volumes increased by 18 percent to 98,422 units in June 2023 compared to 83,267 units in May 2023. But the growth was 4 percent compared to June 2022 volumes of 94,477 units, according to tractor and machinery association data.
June 2023 volume of 98,422 units was the highest monthly number since October 2022.
Kubota Escort sales in June 2023 were flat year over year at 9,270 units (9,265 units in June 2022). However, volumes were much higher when compared to 8,704 units in May 2023.
“Overall sentiment was mixed as markets with good rainfall and crop prices showed good momentum, and demand was weak in markets where the monsoons were delayed,” the company said, adding, “We expect demand momentum to improve in the coming months.”
Mahindra & Mahindra, the largest tractor maker, reported a 9 percent year-on-year increase in June 2023 volumes at 43,364 units. It’s also 30 percent higher than the company’s May 2023 sales of 33,113 units.
Hemant Sika, President, Agricultural Equipment Division, Mahindra & Mahindra Ltd.
Total tractor production last month was 92,266 units, compared with 103,563 units in June 2022 and 79,928 units in May 2023. June 2023 production was the highest monthly figure since September 2022.
In the first quarter of this fiscal year, total tractor sales recorded a marginal decline at 260,977 units compared to 265,618 units in the first quarter of FY23. Production recorded a 9 percent decrease at 259,038 units (284,320 units ), while exports decreased by 31 percent at 24,206 units (35,146 units).
“Wholesale in March 2023 was supported by the festive season; even with fiscal year-end retail sales remaining healthy, wholesale volumes in April 2023 saw a decline (4%) sequentially,” said Rohan Kanwar Gupta, Vice President and Head of Corporate Ratings. , ICRA, said after declining in April, wholesale volumes in May and June remained broadly similar to the previous budget, with industry demand remaining flat.
“Although there were concerns about the impact of unseasonal rainfall on crop yields, cash flows for Rabi remained relatively healthy and offered optimism about continued steady industry volumes, going forward. The temporal and spatial distribution of the monsoon remains observable and will be key to helping preserve on health industry sizes.