February 17, 2023
In October 2022, the Tractor industry in India saw record sales due to festive demand, with a total of 1.24 lakh units sold. This marked an approximately 11% increase in Year-Over-Year sales for Mahindra and Mahindra, the leading tractor manufacturer in India. The COVID-19 pandemic had little impact on the tractor industry in India, with sales only declining in April 2020 due to lockdown measures. However, demand for agricultural machinery, including tractors, increased for the remainder of the period – 2020 to 2021 due to higher Kharif sowing, favourable cash flow for farmers, a typical monsoon season, increased rural government spending, and the lifting of lockdown restrictions.
In addition, the recent announcement of higher minimum support prices for the rabi crop has led to an increase in agriculture-term loans taken out by individual farmers. The long-term growth of tractor volume in India is likely due to government initiatives for rural development and farm mechanization, as well as factors such as high rural salaries and a shortage of farm labor. India is amongst the world’s biggest tractor markets, selling an average of 600,000 to 700,000 units annually between 2016 & 2021.
In the Indian market, 2-wheel drive tractors are more common than four-wheel drive tractors, and local OEMs like Mahindra & Mahindra, TAFE, International Tractors (Sonalika), and Escorts dominate the market. International tractor producers such as John Deere & Company and CNH have also entered the market and established a significant presence.
A Preview into the Past
Tractor output reached its zenith in 1961 at 880 units annually. The tractor industry grew quickly from a total use of more than 500,000 units in 1980 to nearly 700,000 units annually in 2020.
During 2020-2021, the tractor industry saw a significant increase in sales, with a total of 9,88,043 tractors sold. This included a 26.9% increase in domestic sales and a 16.4% increase in exports compared to the previous year. In total, there were 8,99,480 domestic sales and 88,563 export sales, representing an overall increase of 25.9% from the previous year.
We at Suma Soft have deep domain expertise to provide end to end services to Tractor Finance industry. Our portfolio of services includes Lead Conversion, Verifications, CPA processing, Underwriting, Disbursement Processing, Post Disbursement Documentation and Customer Servicing.
Suma Soft aspires to be a strong partner with Tractor finance companies as the industry goes through this demanding period.
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