Tractor Sales in April 2020: Decline of 79.4% due to the nationwide lockdown

Domestic tractor industry witnessed a decline of ~79.4% on-year in April 2020 due to the nationwide lockdown effective from 25th March'20 which led to closing of tractor manufacturing units and dealerships. Even, exports decreased significantly by 87.8% on-year in April 2020 due to lower demand from export destinations and hindrances to export amid the lockdown. The sales numbers show above was recorded in last few days of the month after the exemption of sale of Agri Machinery was announced by the Union Government on 20th April. 

•    Mahindra’s overall sales was 4,772 units in April 2020, as against 28,552 units in Apr’19. Its domestic sales saw a decline of 82.8% while overall sales       slumped by 83.3%. Exports were down by 94.7% against 1,057 units from April 2019.
•    India’s 2nd Largest Tractor Manufacturer TAFE Group  domestic tractor sales were registered 2,982 units in Apr’20  and in Apr’19 it was registered 9,554  units which were decreased by 16.96%.
•    Sonalika tractors domestic sales were 749  units in Apr’20 and it was recorded 5,612 units in FY19 which indicates 86.6% of the drop in the tractor sales.

•    Escorts Agri Machinery Segment announced overall sales of 705 tractors in April 2020 against 5,264 tractors sold in April 2019. Domestic tractor sales of Escorts was at 613 tractors against 4,986 tractors in April 2019.
•    John Deere tractor sales also decreased by 76.7% as sales were registered 1150 units in April  2020 compared to 4909 units in Apr 2019.
•    New Holland tractor sales were only 881 units and in April’20, sales were 2238 units in April’19. 

Tractor manufacturers are hopeful of strong recovery of lost sales as a result of the pandemic-induced lockdown that was imposed from the last week of March.

“Upto 50% of the sales lost due to lockdown from March, April and May can be recovered in the months of June – October as we can see that the rural sentiment is positive on good rabi crop output this year. Water reservoir levels are high and good monsoon forecast will further encourage the demand for tractors," Shenu Agarwal, chief executive officer, Escorts Agri Machinery said

The hopes of tractor manufacturers will also be boosted by the announcements made by the Finance minister on Friday, which focused on providing a stimulus to the agricultural and animal husbandry sectors and allied industries.

M&M has resumed operations across all of its tractor plants except for the Kandivali unit in Mumbai. On May 14, the company’s Mohali-based facilities resumed operations.

"With most of our plants having commenced production, we will ramp up our production numbers through May, as the supply chain opens up," said Hemant Sikka, president, farm equipment sector, Mahindra & Mahindra Ltd (M&M).

Shenu Agarwal added that the farm machinery segment is not hit as much as the automotive industry as agricultural activities were gradually exempted from the lockdown measures.
 

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