Rural economies have fared better compared to urban areas during the lockdown period due to cash flow from crops
Agriculture is among the few sectors that have managed to hold up amid the coronavirus crisis. It is no surprise then that the demand for tractors has also started outstripping supply leading manufacturers to consider ramp-up of production capacity.
The shutdown or scale-back of production during the lockdown period added to the supply shortages.
Auto major Mahindra and Mahindra is planning double shifts to cover up the supply shortages, according to an Economic Times report.
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Hemant Sikka, Chief executive of farm equipment business at M&M told the paper the company has opened to 65 percent of its market and aims for 80 percent to be on track within the week. “Enquiries are going up … cash flow is strong in the rural area on the back of a very good harvest. The government has been proactive in getting the mandi system moving. If the infection curve does not worsen, we can return to normalcy within a quarter,” he stated.
M&M’s segment competitors Escorts and Sonalika tractors also expect the market to revive by next quarter and sales to start growing in the second quarter.
Rural economies have fared better compared to urban areas during the lockdown period due to cash flow from crops. In May, 80 percent of agriculture markets are fully functional, compared to 40 percent in March – which is when the lockdown began.
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