Volume growth of the Indian Tractor Market in the past 4 decades show a CAGR of 7.5%. The Indian tractor industry has seen a positive growth trend during 2017. While domestic volumes increased by 18.2%, exports remained almost flat. The weak demand in the global markets led to near stagnant volumes in 2017. Tractor sales however registered strong growth in 2017-18 with near-normal monsoon.
Performance for 2017-2018
During the last fiscal, the industry registered domestic sales of 5.8 lakh units.
The 2017-18 fiscal began with a consistent growth of 10-15% in tractor sales, mainly on the back of a strong Rabi harvest as favorable monsoon filled up the reservoirs, and a quick recovery from demonetization improved farm sentiments.
The announcement of farm loan waivers in some key States like Uttar Pradesh, Maharashtra, Punjab, and Karnataka also helped to push demand for tractors as agricultural loan liabilities were reduced.
CRISIL Research expects domestic tractor sales volumes to continue growth momentum from previous year. Long-term growth of 8-10% expected. The long term tractor industry CAGR from 2016-17 to 2021-22 is expected to be 8-10%,revised from the earlier forecast of 9-11% from 2015-16 to 2020-21. The forecast also takes into account possibility of 1-2 deficient rainfall years during this period.
Tractor companies and industry analysts project a growth rate of 17-18 per cent for the current fiscal.