Tractor Market Growth Expected To Boost By 15% In FY19
Tractor Market Growth Expected to Boost by 15% in FY19
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Monsoon is a key factor in the agricultural world. With a good monsoon prediction, the tractor industry has been experiencing a boosted growth this financial year and is expected to continue further. As per the tractor manufacturers, the industry is expected to clock an upwards growth of 15%. Companies are aggressively investing in R&D. Further, the increase in domestic demand of tractors is paving the way for less export and more domestic focus.
Rajesh Jejurikar, President – Farm Equipment Sector, M & M said, “All the factors are positive and government spending, especially on the infrastructure and development side, is driving growth in rural India”. Further, he added “A 3rd normal expected monsoon prediction gives us a ray of hope and optimism. “Even though we have adequate capacity, supplier capacity is stretched and in view of this, we need to do a tactical prioritization between domestic production and exports to manage peak seasonal demand. The global revenue of the company in FY18 was recorded 37% of the total and we are expecting it to go enhance by about 50%in the next 2-3 years.” The 1st quarter sales have been reported higher. M & M’s Q1 sales including domestic and exports has boosted up by 19% y-o-y i.e. 1,00,784 units.
Shenu Agrawal, CEO-agri machinery, Escorts said, “Talking about the last year, the tractor market went up to 7,10,000 units and this year Q1 is already blooming by 24%. We expect it to grow further by 15% and finally hit 8,20,000-8,30,000 units this year.” Talking about the Escorts domestic sales, it clocked 24,400 units in domestic sales in Q1, which is 42% up y-o-y. Further, Agarwal added, “Our capacity was 100,000 units and we achieved 80,000 units last year.”“We are expanding capacity to 150,000 units this year so that we are comfortable for even 30-40% growth.”
Rival Sonalika, one of the top tractor brands ended with its highest Q1 sales of 30,000 units – 20% higher. This way the tractor industry is experiencing a phenomenal growth every year as the individual brands are growing at a faster pace. Raman Mittal, ED, Sonalika group gave an overwhelming gesture by saying, “It has doubled itself from 4 lakh units in less than 7 years. It should cross million units quite soon.”
It is quite obviously visible that the tractor companies are aggressively investing in R&D. For example, Sonalika is investing around 450 crores on its new R & D facilityin Delhi-NCR as well as tooling, machining for its new product range this year. The company which accomplished 100,000 units in the last fiscal, is targeting 120,000+ units this year and 200,000 in less than just 5 years, said Mittal.As far as Escorts is concerned, it is targeting a market share of 15-16% by the end of 2022, which is 11% from now. At present, M&M – Swaraj is the no. 1 tractor brand followed by TAFE-Eicher, with Sonalika and Escorts at number 3 and 4 positions respectively.