India’s tractor industry volume likely to decline 5-6% YoY in 2024, says CNH India MD

India's tractor segment is set to witness a decline in sales volume in the calendar year 2024, on the back of a high base in the previous year. Narinder Mittal, Country manager and Managing Director of CNH India and SAARC, projects a 5-6% decline in tractor industry volumes on a year-on-year basis. 

“The industry volume is already down by around 12 percent in this calendar year (to date). This year, we see that industry could go down by 5-6 percent. But the volumes are still a high number,” Mittal told Autocar Professional. In the previous calendar year, the company’s management noted that the industry sold around 915,000 tractors, which represented a growth of 2 percent. 

Apart from the high base and elections, a major reason that has impacted sales in the current year is erratic weather conditions in the previous year, which has dampened sentiments in the rural areas. “Last year the monsoon was very erratic. States like Maharashtra and Karnataka did not get sufficient rainfall and the impact would naturally be felt in the first half of the current year,” he said.

Tractor and two-wheeler sales are known to be a proxy for the country's rural economic health.  

Rainfall received across the country during the monsoon season last year was below normal. Patchy monsoons caused by the El Nino weather phenomenon also hit the foodgrain production during the previous crop year. Total food grain production in the crop year 2023-24 was lower when compared to the crop year 2022-23.

Though the tractor volume fell in double-digits in the first half of the current year, the sales are expected to pick up in the second half of the year. The country’s weather forecasting agency has projected above-normal rainfall for this monsoon. “The monsoon forecast prediction for this year is quite good. So, we feel the second half of the year should get better. Not just the second half, but also the first half of next year,” Mittal added. 

CNH manufactures agriculture and construction equipment and has a market share of around 4.3 percent in the domestic tractor market. Its New Holland brand offers tractors ranging from 20 to 110 horsepower, besides harvesting solutions such as combine and sugarcane harvesters, crop residue management, and farm mechanisation solutions.