Sonalika overtakes TAFE to become India’s third largest Tractor OEM in Aug’20

Tractors was the only category to register YoY growth in August 2020. Tractors registration continued its positive momentum showing a growth of 27.8% in Aug’20 v/s Aug’19.

Rural market continued to show strong growth due to a good monsoon. Tractor sales was positively impacted with the monsoon progress and spread. Riding high on back of good monsoons, favorable Kharif season and increased disposal income in the rural areas majority OEMs registered high double-digit growth in August 2020 sales.

OEM wise Tractor Sales Performance for August 2020 – 

Source: FADA research
  • Mahindra + Swaraj commanded a Market Share of 39.85% in August 2020 and its market share increased by 0.6% when compared to August 2019.
  • Sonalika outsold TAFE in Aug’20 and recorded a Market Share of 12.7% in August 2020. Sonalika has been extremely consistent in the past few months and the sales growth is a testimony of it.
  • TAFE registered sales growth too and grew 18.39% in Aug 2020 v/s Aug 2019. It saw its market share decline by 0.91% and slid to the fourth spot.
  • Escorts  recorded a YoY growth of 24.96% and its market share fell by -0.23%.

Statewise Tractor Sales / Registrations in August 2020 – 

Source: FADA research
  • Maharashtra performance was exemplary in August 2020. Maharashtra YoY growth was a record 169.6%.
  • Bihar was the only eastern state in top 5! Bihar’s tractor sales improved a mammoth 44.7% in Aug’20 v/s Aug’19. The return of migrant workers in Bihar has given an stimulus to the sale of tractors in the state, with the state recording one of the highest increase in percentage terms in August 2020. As per experts opinion, the migrants are looking at agriculture as an alternate employment opportunity to compensate for loss of jobs during Covid-19.
  • Gujarat was the No.1 State in terms of Tractor Sales and it registered a YoY growth of 4% as well.
  • UP came in second and around 12,571 tractors were registered in August 2020.
  • Rajasthan ranked fourth and was 1,024 units short of Maharashtra.
  • It is also surprising to see that only 5 tractors were registered in Kerala in August 2020!

1- The above numbers do not have figures from AP, AN, MP, LD & TS as all these States/UT’s are not yet on Vahan 4.
2- Vehicle Registration Data has been collated as on 07.09.20 and in collaboration with Ministry of Road Transport & Highways, Government of India and has been gathered from 1,242 out of 1,450 RTOs.

Tractor Sales Statistics India – FY2020

Tractor Sales in India contracted by over 10% in FY2019-20 v/s FY2018-19. It is the first in past 3 years that the Tractor Industry saw a degrowth!

Tractor Sales Data have been an apt indicator about the performance of Rural Economy in the country. India is an Agriculture driven economy and the contribution of Agriculture on India’s GDP is as high as 16%. Contribution of Agriculture sector in Indian economy is much higher than world’s average (6.4%). Also almost 70% population in the Rural Areas primarily depend on agriculture for livelihood.

The Tractor Industry in India also suffered in FY2020 due to economic slowdown, unusual monsoons last year and the recent Covid19 outbreak. The Industry registered a YoY degrowth of -10.1% in FY2019-20.

OEMwise Tractors Sales Statistics –

  • Market Leader Mahindra & Mahindra recorded a drop of -7.8% in FY20 v/s FY19. However; Mahindra saw 1% increase in Market Share and strengthened its position in the market. Do note that Mahindra’s volumes include PTL numbers too (i.e. Swaraj Tractors).
  • TAFE continued to be in the 2nd spot; but lost hefty -1.41% Market Share in FY20. TAFE’s loss was primarily John Deere’s gain. John Deere had an exceptional FY20 and was one of the few OEMs to record a positive YoY growth and helped gain Market Share.
  • Do note that Indian OEMs have clear dominance in Tractor Industry. The Top 4 OEMs (M&M, TAFE, Sonalika & Escorts) combined command a Market Share of over 81% and is quite impressive. Will this scenario ever happen in passenger cars too where Indian OEMs lead the way?
  • Japanese Tractor Manufacturer Kubota grew stellar 18.8% in FY20 v/s FY19. Kubota is slowly making strides in the Indian Tractor market but has a long way to go for gaining volumes.

Market Share Graph – 

Market Share Movement for past 5 Financial Years – 

  • M&M has been consistently maintaining the Market Share. Do note that Mahindra’s market share in past 5 FY has been almost similar!
  • TAFE’s market share has receded from 23.1% in FY16 to 16.9% in FY20. Not a good sign for the manufacturer.
  • John Deere has gained good traction in past years and its Market Share shot from 6.1% in FY16 to 9.6% in FY20!
  • Kubota’s growth too has to be noted – has been able to jump to 1.8% Market Share in FY20.

Data Source: Tractor Junction