Weak monsoon dents tractor sales for June

Tractor cultivating field at spring,aerial viewFarmers are increasingly united in the recognition that their environment is changing.

Below normal monsoon for the current season has added to the woes of the commercial vehicle industry as tractor sales for the month of June have seen a dip. The sales have declined 17% year-on-year to 42,054 units during the month compared to 50,512 units sold in the corresponding period last year.

Tractor market leader Mahindra and Mahindra, which sold 40,529 units during June last year witnessed a decline of 18.3% YoY to 33,094 units in June this year. Escorts has performed better than M&M during the month. Its sales dipped by 11% y-o-y and outperformed M&M in the tractor segment, said Motilal Oswal Financial Services (MOFSL) in a report.

“Tractor demand remained sluggish in June. We hope the onset of the monsoons and the upcoming Union Budget allocations to the rural and agri sectors will drive positive sentiments in the coming months,” said Rajesh Jejurikar, President, Farm Equipment Sector, M&M.

According to MOFSL, a decline in tractor sales was due to a high base and muted farm sentiment.

The announcement by Australian Bureau of Meteorology (BOM) that El Niño may stay neutral, at least till November 2019, comes as good news for India, where the country’s farm-dependent nearly $2 trillion economy is vitally linked with monsoons.

The decline in M&M’s overall tractor volumes was led by -- (1) 19% y-o-y decline in domestic volumes and (2) 3% y-o-y decline in export volumes in June 2019.

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