Tractor sales remained strong in August, primarily due to positive sentiment, increase in Kharif sowing area, good monsoon, good rural cash flows and base effect, among other factors.
While all tractor makers, except Escorts and Mahindra, are yet to publish the numbers for August, T R Kesavan, President, TMA estimates overall sales in the month would have grown by about 70 per cent in August 2020 from 37,050 units last year.
He said, farmers' sentiments are good, rural economy is positive and cash flow is gealthy too. He estimates 7-10 per cent growth for the entire fiscal.
The top two tractor makers, Escorts and Mahindra, reported 80 per cent and 69 per cent growth respectively in August.
Escorts' domestic sales rose by 79.4 per cent to 6,750 units from 3,763 units, while exports were up 90.4 per cent to 518 units from 272 units. Month-on-month volumes rose by 36.6 per cent.
The company said this is its highest ever August sales it has reported.
"We remain optimistic for the coming festive months. Market sentiment continues to be highly positive with good monsoons, better Kharif sowing, crop prices holding up well, and good supply of retail finance. We remain optimistic about the coming festive months. The supply side situation has improved significantly as compared to last month. We are currently operating close to peak capacity now. In August 2020 we could build some inventory both at dealers and depots, which since the last few months was at very low levels," according to the company statement.
Mahindra & Mahindra's domestic tractor sales were up 69 per cent this August, at 23,503 units, as against 13,871 units during August 2019.
Total tractor sales (domestic and exports) were at 24,458 units, as against 14,817 units for the same period last year.
Hemant Sikka, President-Farm Equipment Sector, Mahindra & Mahindra Ltd, said that on the back of highest ever sales in July, the company clocked yet another highest ever sales in August.
"We expect rural sentiments to remain positive and translate into robust tractor demand as we move into the festive period," he added.