Tractor Industry remains a bright spot amid a gloomy Automobile sector
Biznextindia : While the entire automobile industry is reeling under weak demand caused by the COVID-19 pandemic, the Tractor industry has emerged as a bright spot. After remained low in March and April due to the lockdown, the industry has registered strong recovery since May.
In fact, the tractor segment in the only industry under the Automobile sector which has reported positive YoY growth in the months of June and July. In July, while, tractor production and sales in India rose by 14.4 per cent and 36 per cent respectively, all other segments like Two-wheelers, Three-Wheelers and Passenger Vehicle have reported de-growth.
“ Tractor purchases usually start in the month of March to last up to June, which are the months prior to and start of monsoon and includes Kharif sowing season. September and October again witness a spike in consumer demand aided by the festive season, the harvest of Kharif crops and sowing of Rabi crops. In FY21, tractor purchases remained low in March and April due to lockdown-induced supply constraints, but witnessed a good momentum in May and June due to pent up demand, followed by a dent in July. Tractor sales (including exports) in July 2020 de-grew by 28.4% M-o-M, but witnessed a positive growth of 35.9% on Y-o-Y basis” said Care Ratings.
Outlook bright !
The tractor Industry is expected to remain in the positive zone backed by a good demand in the domestic market.
“In the on-going pandemic, the agricultural sector is performing relatively better than most other sectors, aided by inelastic demand for food products, a timely and normal monsoon and continued higher rural spending by the government. This will favour tractor demand to remain buoyant in the forthcoming months” said Care Ratings.