Perhaps for the first time ever, monthly tractor sales by a company surpassed the sales of the biggest manufacturer of cars and SUVs in India.
Mahindra & Mahindra’s (M&M) sales of tractors at 24,017 units in May beat that of Maruti Suzuki’s 13,865 units in the same month. Nation-wide lockdown and restricted easing of rules due to the coronavirus was the biggest cause of this anomaly.
M&M is India’s largest manufacturer of tractors with a share of more than 40 percent in the domestic market while Maruti Suzuki is the largest manufacturer of passenger vehicles (PVs) with a share of 51 percent.
Besides exempting agricultural activities from the lockdown the government had exempted manufacture and sale of agri-equipment including tractors though there was still an impact due to lack of parts availability in the initial days.
As the impact of COVID-19 was not felt in rural areas as severely as in urban areas, sales of tractors were not impacted to the same extent as on PVs. M&M clocked a growth of 2 percent in tractors sales in May in the domestic market while Escorts reported a fall of under 1 percent in May to 6,454 units.
Maruti Suzuki, Hyundai, M&M, Honda, Toyota and MG who control 85 percent of the domestic PV market saw 80-90 percent declines in sales during May as only 70-85 percent of their dealerships were open during the month.
June is expected to be better for PVs compared to may given more reopening of showrooms, better production supplies and further easing of social restrictions. Tractor sales are expected to remain better due to the government’s continued focus to boost farm income and a normal monsoon.In a statement Hemant Sikka, President - Farm Equipment Sector, Mahindra & Mahindra said, “The timely relaxation of the lockdown for the agricultural sector helped ensure the speedy recovery of tractor demand during May. In the near term, farmer sentiment is likely to remain positive due to several developments including robust Rabi crop production, higher procurement, good price realizations and the forecast of a normal monsoon that bodes well for a good Kharif crop. All these augur well for tractor demand going forward”.