Tractors to witness high growth on good monsoon

CHENNAI: A normal monsoon will help India’s tractor industry continue the growth clip it has totted up in the last two years. After a flat 2008, when the credit crunch hit the entire automobiles industry, the tractor industry has been on a roll. Growth topped 30% in 2009, followed by 20% in 2010. “We expect the industry to grow at least 12-13% this year backed by normal monsoon,” said Pawan Goenka, president, auto & farm equipment division, Mahindra and Mahindra (M&M).
Alongside normal monsoon, what have helped the industry are the government’s rural policies like NREGS, the rural job guarantee scheme. “NREGS has impacted mobility of labour as well as cost of labour which has triggered an interest in mechanisation,” Mallika Srinivasan, chairman of Tractors and Farm Equipment (TAFE), said. The trend, she says, has been not just “robust growth” industrywide, but also growth from new markets like Bihar along with a “strong export demand”.
The monsoon story is of course crucial to the tractor industry but the devil may lie in the swings. “If the monsoon is varied then the fortunes of the more agrarian states will determine growth,” said Srinivasan. Independent of monsoon, the industry is slowly moving towards higher horsepower tractors and greater use of farm implements like harvestors. Typically the biggest growth now comes from 50 HP and above segments while the 30-40 HP and below show sluggish growth although on a bigger base.