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Record Tractor Sales in Rural Market Bring New Hope for Covid-19 Hit Indian Auto Industry

MS Dhoni Tractor

MS Dhoni Tractor

The rising tractor sales in the past few months reveals the emergence of rural market as a new frontier for auto sales.

The arrival of COVID-19 in India and the resulting lockdown has impacted the Indian auto industry hard, as all the automakers sans specialty reported massive sale loss. While the March month sales took a hit for only 1 week, as the lockdown was announced on March 23, April 2020 was a zero sales month, first time in the history of Indian auto industry.

While the lockdown was partially lifted in May and showrooms across brands were opened, sales was negligible. June, however has shown significant improvement as compared to previous months. Many trade pundits though, consider it a pent up demand and have warned that the long term effect of the lockdown is yet to be realized.

While the trend was similar for both the two-wheeler and four wheeler categories, tractor sales has shocked the industry, revealing the emergence of rural market as a new frontier for auto sales instead of urban market, which has been leading the auto sales thanks to working class people, who buy cars and bikes in large numbers.

Coming back to the tractor sales, companies like Sonalika and Mahindra ruled the rooster registering record sales in June 2020. One of the leading tractor manufacturing brand & number one exporter from the country, Sonalika Tractors outpaced industry by 2.4X times setting a new record of highest ever domestic sales of 13,691 unit, registering 55% growth and overall sales of 15,200 tractors.

Speaking on the performance, Mr. Raman Mittal, Executive Director, Sonalika Group, said, “Beginning of Q1 this year when the first-ever lockdown was announced we as a company had decided to put all our energies with positive effort to try not to de-grow in Q1. Today, the entire team is feeling proud that we have not just achieved our goal but also have registered an overall growth of 5% in Q1 which is highest for the industry. It is a matter of great pride for us that not only in tractor industry but also in the automotive, two-wheeler and CV industry, Sonalika is the only company to register maximum growth in these tough times. We are extremely delighted with the overall robust performance in June’20 with 15,200 tractors which is our highest ever.”

On the other hand, Mahindra & Mahindra Ltd.’s Farm Equipment Sector (FES) has reported 12 percent rise in its domestic tractor sales at 35,844 units in June 2020. Total tractor sales (Domestic + Exports) during June 2020 were at 36,544 units, as against 33,094 units for the same period last year.

Commenting on the performance, Hemant Sikka, President - Farm Equipment Sector, Mahindra & Mahindra Ltd. said, “This is our second highest June sales ever. The timely arrival of the south west monsoon, combined benefits of a record Rabi crop, Government support for Agri initiatives and very good progress in the sowing of the Kharif crop have led to positive sentiments among farmers."

He further said that it is expected that this demand will continue to remain buoyant in the coming months.