Indian Tractor Industry is on a downward swing ever since end of 2011. The recent drought situation in the country is further expected to impact sales and this situation is not likely to improve till such time as this situation improves. The tractor industry saw marked improvement in period 2010 to early 2012 following which sales both domestic and exports dipped by 3.4% in the fourth quarter of financial year 2012. In the first quarter of this financial year there has been a 2.8% growth.
This is not enough to sustain the industry and this dramatic slowdown is likely to affect further developments and growth in the Tractor sector. There were many factors contributing to this. Low purchasing power of poor farmers, delays and deficient monsoons this year, higher rates of interest and price hikes by the tractor manufacturers are all contributing to poor sales.
The only silver lining appears to be the continuous support from the Government of India in terms of rural development programs, agri mechanization and increase in credit flow to agriculture. ICRA expects tractor sales to continue in this lack luster vein through the second quarter of this financial year as well, with sales are only expected to improve on the recovery of monsoon.
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