Tractor sales, production rise in May after economic activity resumes: Report

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After economic activity resumed in phased manner on lifting of lockdown restrictions due to the novel coronavirus, or COVID-19, pandemic, tractor sales and production saw a strong recovery in May.

Total tractor sale volumes in May stood at 64,860 units, including exports of 4,419 units, BusinessLine reported.

This is a sharp increase from total sales (including exports) of 35,216 units in March and 12,256 units in April.

Tractor production stood at 30,751 units in May as against 39,200 units in March and 158 units in April, the report said, citing data from the Tractor & Mechanisation Association.

The Centre eased restrictions in May and permitted all manufacturing activity to resume with certain guidelines for health and safety.

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"Timely relaxation of the lockdown for the agricultural sector helped ensure speedy recovery of tractor demand in May. In the near term, farmer sentiment is likely to remain positive," Hemant Sikka, President - Farm Equipment Sector, Mahindra & Mahindra (M&M), told the publication.

M&M, India's largest manufacturer of tractors, had posted domestic tractor sales of 24,017 units in May versus 4,716 units in April.

Sonalika Tractor, which was operating at 20-25 percent capacity in May, reached 80 percent in the fourth week of the month, the report added. The company is expected to operate at 100 percent capacity utilisation in June.

"In the current scenario, it is expected that all the financial institutions would be very aggressive in tractor financing since the rural industry is expected to grow compared to other automobile segments," Raman Mittal, Executive Director, Sonalika Group, told the paper.

"Favourable monsoon, the government's support for agriculture operations and availability of financing have led to week-on-week delivery growth in May and we are expecting the growth momentum to continue this month as well," Mittal added.