Tractor industry poised to see lifetime high exports in FY23: Hemant Sikka
Tractor exports have primarily picked up due to the competitive pricing of locally manufactured farm machines that provide better technology, more comfortable cabins and AC-fitted tractors at much lower cost than their foreign counterparts.
Unlike the automotive industry, which has witnessed several ups and downs since the COVID pandemic, the Indian tractor industry has remained resilient throughout this period.
In line with the brilliant domestic performance for the past three years, the tractor industry has also been seeing consistent growth in exports.
In the April-November period of the ongoing financial year (FY) 2022-2023, the industry exported 89,192 tractors as compared to 85,281 units during the same period in FY 2021-22, as per the figures from the Tractor and Mechanization Association (TMA).
"The overall industry has performed better. As per my estimates, exports will be close to 130,000 units in FY23. Currently we are exporting to the US, Europe, Australia, Brazil and some other developed markets of the world. From the Mahindra & Mahindra (M&M) perspective, in FY21 our company exported 12,500 units. Last year our exports grew 66 percent at 17,600 units and this year we are expecting another 20 percent above this," said Hemant Sikka, President of Tractor and Mechanization Association (TMA) who is also the President of Mahindra & Mahindra Farm Equipment Sector in an exclusive interaction with Autocar Professional.
Notably, the Indian tractor industry gets roughly 10-15 percent of its revenues from exports.
This trend of surging demand has been largely seen in Europe and the US where the demand of Indian tractors has gone beyond expectations. “We have established the 'Make in India' brand in many countries. Our quality, application orientation and pricing are well established and I think India has made its brand for tractors up to 100 HP,” Sikka added.
He further added that many manufacturers have developed the competencies and product range at a competitive price which are suitable for the markets outside. At present, the US holds the largest share of 25.2 percent of the tractor export pie, followed by Nepal with 7.3 percent, Bangladesh with 6.5 percent and Thailand with 5.4 percent. Brazil and Turkey also account for a sizable chunk of export sales.
Moreover, exports have primarily picked up due to the competitive pricing of locally manufactured farm machines that provide better technology, more comfortable cabins and AC-fitted tractors at much lower cost than its foreign counterpart.
“These days, agri machines are packed with a lot of new features and updates. Some of the features which were non-existent a few years back have now become mainstream for example four-wheel drive, dual clutch, Slipto, auxiliary valves, Power Take Off (PTO). These are some features that are very important for the application suitability of the tractor and led to better productivity and ease for farmers. Once the machine becomes better, it always creates a demand,” Sikka explained.
On a similar note, surpassing all expectations and projections, tractor sales in the domestic market during FY23 are expected to breach the previous decade's high peak in the financial year (FY) 2020-2021.
The tractor industry ended FY 2020-21 with a growth rate of 21 percent, selling a record of 899,000 lakh-plus units. While the final numbers are awaited, the FY23 growth rate is expected to be a bumper one, fuelled by multiple factors including a consistently healthy monsoon, improved farm cash flows across regions, better crop realizations and prices, and the government’s focus on procurement.
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