Sales of tractors are likely to bounce back quicker due to a good summer crop, benefits of the recently announced government benefits and expectation of a good monsoon
Sonalika Tractors – one of India’s largest tractor manufacturers – on Thursday reported a 55% year-on-year increase in domestic sales of tractors to 13691 units in June, on the back of robust recovery in demand in the rural market. This is the highest ever sales registered by the company.
Sales of tractors are likely to bounce back quicker due to a good summer crop, benefits of the recently announced government benefits and expectation of a good monsoon. The impact of Covid -19 is also limited in the rural areas compared to the urban pockets.
According to Raman Mittal, executive director, Sonalika Group, beginning of the first quarter this year when the first ever lockdown was announced the company had decided to put all its efforts to avoid a decline in sales. The company reported an overall volumes growth of 5% in the April to June quarter, which is highest in the industry.
“Our focus to keep innovating, developing and launching new product continued during the time of Covid-19. We had a series of new products that were launched during this period, which have helped the farmers immensely to increase their productivity, reflecting in volume gain for our tractors," added Mittal.
In May the company reported wholesales of 9177 tractors.
According to ratings agency Crisil, the Covid-19 induced economic slowdown is unlikely to have any negative impact of tractor sales during this fiscal.
Despite a 37% on-year decline in April and May combined, tractor volume will likely be barely 1% below last fiscal’s level, in sharp contrast to a double-digit decline expected for the rest of the automobile industry, the agency said in a note.
“Apart from overall adequacy, monsoon needs to be spatially well-distributed – by geography and timeliness (June-September) – to propel farm incomes and stoke demand for tractors. The IMD’s forecast is very encouraging for tractor volumes this fiscal," said Manish Gupta, senior director, Crisil Ratings.
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