CHENNAI, February 20: In a major reversal of fortunes, tractor sales have dipped for the first time in over three years. During January, 1998, the industry sold 17,877 tractors, down three per cent from the January, 1997 sales of 18,420 tractors, according to industry estimates.However, cumulative tractor sales during April-January, 1998, have grown by 11 per cent to 1.98 lakh units from 1.78 lakh units during the corresponding period last year. Industry sources expect to end the current year with a "positive growth". "The actual year-end figure may however be only about 2.3 lakh tractors, well below earlier expectations," sources said.
The negative growth in January comes after a sharp deceleration in growth rates during the third quarter of the current year.
Against a growth of 15 per cent during the first half, the industry had registered a growth of only 10 per cent during the third quarter.
Industry sources attribute the slowdown to factors like excessive snow fall and crop failures in certainmarkets. "Tractors can't continue to defy the general slowdown in the economy. A slowdown is due now," an industry source said.
Interestingly, most players have reported a marginal growth in sales during January. But it was a 30 per cent drop in Escorts' sales which has pulled the industry to a negative growth.
Escorts could sell only about 2,700 tractors last month as against 3,865 sold during January, 1997.
Industry leader Mahindra & Mahindra (M&M) registered a three per cent growth during the month with a sales of over 4,500 tractors. TAFE grew by 7.5 per cent to over 4000 tractors.
Punjab Tractors, which had staged a 20 per cent growth during the third quarter this year, decelerated sharply. It sold about 3,350 units, registering a growth of only 3.6 per cent. Eicher sold 1809 units as against 1,572 units sold during the corresponding month last year.
"Inventories and excess capacities are some problems that tractor manufacturers have to contend with if the slowdown continues," analysts felt.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
