Domestic tractor sales in August hit the lowest monthly level in 2023. Tractor sales increased slightly year-on-year but declined month-on-month. Production hit an 11-month high last month, and exports continued to improve month-on-month.
Total domestic tractor sales stood at 53,259 units in August 2023 as against 52,691 units in August 2022 as deficient monsoon affected demand.
However, sales fell 9% last month compared with 58,583 units in July 2023, according to the Tractor and Mechanization Association.
Top tractor manufacturer Mahindra & Mahindra Ltd reported a 3% sales increase at 20,647 units in August 2023, while Escorts Kubota reported a 2% decline in sales at 5,198 units.
Escorts Kubota said while there was positive momentum in some markets due to government subsidy schemes, deficient monsoon in August in other areas, coupled with the shift of the key festive season to the third quarter of the current fiscal, affected tractor sales in August.
Total production in August was 94,125 units, compared with 89,196 units in July 2023 and 98,745 units in August 2022.
Tractor production hit an 11-month high in August as the industry expects tractor wholesale to be harvested this festive season as sowing operations across the kharif are on track.
Market conditions remain favorable for rural farmers, with input inflation cooling and crop prices remaining firm. Tractor manufacturers said that while other macroeconomic factors remain unchanged, tractor demand is likely to see a good pickup in the coming festive months if monsoon arrives in water-starved areas in September.
Meanwhile, Escorts Kubota has announced that it will increase the prices of its tractors from September 16, 2023. The reason for the price increase was not disclosed.
Tractor exports increased to 8,874 units in August, compared with 8,460 units in July 2023. However, compared with 12,118 units in August 2022, exports have dropped significantly.