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Domestic tractor sales declined by 13.2% y-o-y in November 2019 on account of crop loss due to excess rain, lack of subsidy and lower commercial activity. Exports too declined by 8.5%.
The Indian Tractor industry saw a relatively good time during the Festive season with many Manufacturers reporting growth. However, post-Diwali season, the sales slump has started showing its effects with most Tractor Manufactures reporting declining sales for November 2019 as compared to the same period last year. Mahindra Group noted that its tractor sales for the last month dropped by 18.9 percent as compared to the same period last year, from 25,159 units to 20,414 units and lose 2.6 per cent market share.
Slow down in rural demand and uneven rain has led to a drop in tractor sales, both domestic and exports. In the April-November period of FY19-20, tractor sales decreased by nearly 11.2% year-on-year. Tractor marketers see this as course correction.
TAFE group reported a 25 percent decline in Tractor sales for November 2019 as compared to the same period last year, from 12,305 units to 9,229 units. Tafe group lost the highest 2.67 percent market share in Nov’19 to competitors.
Financial Year 2020 is not so well for Tafe group. Cumulatively, the company sold 91,231 units of tractors in the domestic market during April-November 2019 period against 1,09,451 last year, down by 16.6 percent and lost 1.25 percent market share. TAFE is losing most of its market share in RJ, MP, UP, MH, AP and Bihar.
“The disparity in the two firms’ sales decline could also be partially attributed to different inventory holding strategies being followed by the original equipment manufacturers (OEMs)," says Rohan Gupta, assistant vice president (corporate ratings) at Icra Ltd.
Over a 4 year period, the industry CAGR is comfortingly positive. “We expect a good Rabi output in the coming months which will generate positive sentiment and drive growth. Even though the industry has seen a negative growth in FY20 , the industry CAGR (April to November) over last 4 years is a healthy 8.8%,” said Rajesh Jejurikar, president-farm equipment sector, M&M.
Escorts were at No. 3 on the list of best sellers in November 2019 despite a significant reduction in sales. Escorts maintained 13.55 percent market share in Nov month and 11.41 percent during April-November 2019. Escorts registered Growth in market share by 0.35 percent.
Escorts Ltd Agri Machinery has registered 7,642 units of tractor sales in November 2019, down 4.5 percent compared to 8,005 units in the same month last year. Domestic Tractor Sales of the company tanked to 7,379 units last month, a drop of 3.4 percent compared with 7,641 units sold in November 2018. Cumulatively, the company sold 59,324 units of tractors in the Indian market during April-November 2019 period, down 8.7 percent compared with the same duration in FY19.
Sonalika Tractors sales of dipped as much as 16.20 percent in the past month. Sales which had stood at 8,029 units in November 2018 dipped to 6,729 in November 2019 . Sonalika managed to have 12.36 percent market share in Nov’19.
John Deere India performed extremely well, sales increased by 51.8 percent in comparison to Nov’18. As this is the first financial month for John Deere because they count financial year from Nov-Oct instead of Apr-Mar. JD sold 5,202 units of tractors in compare of 3,427 of last year Nov Month.
So far FY2020 (Apr-Mar) was so well spent for John Deere as they sold Cumulatively, 46,728 units of tractors in the domestic market during April-November 2019 period against 49,925 last year, down by 6.4 percent but gained 0.46 percent market share in domestic.
New Holland Tractors maintained market share in last month because sales dipped by 13.2 percent which matched industry dip of 13.2 percent in Nov’19. Sales which had stood at 2,808 units in November 2018 dipped to 2,436 last month.
Kubota Tractors sales surged to 1,056 units, up 1.00 percent as compared to 1,046 units sold in Nov 2018. Cumulatively Kubota registered 21.5 percent growth which is 2nd highest in growth during April-November 2019 after Same Deutz Fahr who tops the list with 25.4 percent growth in the same duration.
V.S.T. Tillers, Tractor sales also tumbled 9.55% to 504 units in Nov’19 against 598 units in November 2018.
Preet Tractors sales surged to 210 units, up 46.9 percent as compared to 143 units sold in Nov 2018.
Force Tractors sales decreased by 37% to 204 units in Nov’19 against 324 units in November 2018.
Ace Tractors sales decrease by 30% to 197 units in Nov’19 against 282 units in November 2018.
Indofarm sales decrease by 2.8% to 286 units in Nov’19 against186 units in November 2018.
Captain Tractors sales also decreased by 22.7% to 143 units in Nov’19 against 185 units in November 2018.
Tractor marketers say the current contraction has to be seen in the context of the fact that the tractor market saw three flat years of increase in sales before the current downturn hit.
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