Tractor sales to be hit as second Covid wave impacting rural areas
The company, which has a joint venture with Japan's Kubota, is looking at around 55 per cent growth in exports in 2021-22.
New Delhi: With the second wave of the COVID-19 pandemic hitting rural areas, tractor sales will be impacted in the short term although in the second half of the fiscal it is likely to pick up to give the industry a mid-single digit growth, according to a senior official of farm equipment major Escorts Ltd.
The company, which has a joint venture with Japan’s Kubota, is looking at around 55 per cent growth in exports in 2021-22 with Europe serving as one of the main drivers while it plans to enter markets in South East Asia and Brazil through its partner.
“Unlike in the first phase (of COVID-19) where the impact was not at all there in the rural market, this time it is all very spread out. It is also impacting channel partners and dealerships are also closed,” Escorts Group CFO Bharat Madan said.
Madan said “all the rural factors are still positive on the agriculture side” and “this will give a mid-single digit sort of growth over last year”.
As per Federation of Automobile Dealers Associations (FADA), tractor registrations in 2020-21 grew by 16.11 per cent at 6,44,779 units as against 5,55,315 units in 2019-20.
“Today we are doing 500 plus tractors exports every month. So this year we are looking at a good number, 6,000-7,000 units as against 4,000-4,500 we did last year.”
“This time the maximum exports are happening to European market, where smaller tractors of sub-30 hp segment are doing well. It is the largest selling model in exports now, and that has really contributed to the good growth.”
“This is the third year in a row that we are seeing a good monsoon. We expect, maybe, some corrections will set in next year,” he said, adding the existing capacity should be enough for at least the next few years.
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