Expect growth of 9-11% in tractor volumes in FY15: M&M

Sanjeev Goyle, Senior Vice-President (Marketing & AppliTrac) at Mahindra and Mahindra expects to clock 17 percent growth in tractors for FY14. The Group's tractor arm reported a 15 percent growth in sales at 20,109 units in January, driven by a robust Kharif crop and an expected good rabi crop. The company had sold 17,473 units in January 2013, a company release said here. The domestic sales stood at 19,389 units, a growth of 18 percent over January 2013, it said. Goyle expects growth of 9-11 percent in tractor volumes in FY15. He says all southern markets, except Tamil Nadu have seen growth this year. However, overall, western markets are doing better than southern, he said.Below is the transcript of Sanjeev Goyle interview to CNBC-TV18’s Sumaira Abidi and Nigel D'Souza. Sumaira: Can you take us through what kind of growth trajectory you will now be targeting? You have already seen about an 18-19 percent uptick this time around. Is that the trajectory we can expect also going forward?A: An overall growth of close to 17 percent is likely this year. As you move into the next year, we are expecting about 9-11 percent of growth. A double-digit growth is a very good growth for the industry.Nigel: What is the trajectory in the southern as well as western region?A: The western region has done significantly well. Maharashtra has done very well. Karnataka has done well and one would say so for MP and Chhattisgarh as well. However, Tamil Nadu, which is where overall growth should have been because of Pongal, but the winter rains have really been a spoilsport. Hence, Tamil Nadu's growth has just not been there. One has seen a significant degrowth in the industry in Tamil Nadu.

Sumaira: You have said that for this year you are targeting total sales of 17 percent, but by next year, you expect it to moderate it to 9-11 percent. On what account is this moderation? Can you tell us what your market share stands at?A: In terms of pure industry growth, we are expecting 7-8 percent this year. The double-digit growth of 9-11 percent onward is expected because of a much larger base this year. The industry is going to add close to a lakh tractors to its base and hence on a larger base double-digit growth itself is a very good growth rate.Nigel: What about your HP segment? It has being seeing some kind of traction. Give us a percentage that it contributes?A: The HP segment, which is 40-50 horsepower and 50 horsepower plus, is showing significant growth. In addition, the northern markets, which means markets such as Rajasthan, MP and western markets, are growing better than the southern markets. In terms of a market share we are currently at close to 42 percent share of the industry.Sumaira: Are there any price hikes that are planned perhaps next month going forward?A: On January 4, we have taken a price hike of Rs 4,000 per tractor, which is a small hike. We had to take it primarily on account of material costs moving northwards.