Tractor Production and Sales in India

Demand of tractor is dependent on a large number of factors like requirement of increased work capacity, preference to better work environment, resource availability, available credit facilities and interest rates, apart from other factors like intensity and occurrence of monsoon, irrigation potential, cropping intensity, ownership pride, etc. Tractor use in agriculture has been mainly for power requiring operations like tillage, sowing, interculture, threshing and transport; the use in field operations being about 35 to 40 per cent and the rest in transport. Domestic production of tractors in the country started from year 1960–61 with 880 tractors and after 50 years, it crossed the 350,000 tractors. Until 1960, the demand for tractors was met entirely through imports. The Indian tractor industry has come to long way since then. Volume growth in the past four decades show a Annual Compound Growth Rate (ACGR) of 10 per cent, despite seasonal variations that cause natural fluctuations in the demand for tractors. Average sale of 31–40 hp tractor was highest with 52.87percent followed by 41–50 hp tractors with 21.31 percent, <30 hp tractors with 19.79 percent, >51 hp tractors with 6.03 percent. Analysis also indicates down trend in domestic sale of <30 hp tractors during different years. Export of higher range of models of tractors is in demand as compared to lower range. Positive ACGR was found better in the tractor of>51 hp power range as compared to other power ranges of tractors. In the long term, the tractor industry growth is expected to continue from a moderate ACGR of six to eight percent largely due to continued thrust by the government to increase agricultural GDP The domestic industry is to stabilize at about 3,50,000 tractors annually and exports to reach in excess of 70,000 tractors per year by 2012.