Field Day: Tractor Sales Record Huge Spike During Lockdown Despite Expensive Loans
While people are avoiding buying vehicles during the coronavirus pandemic amid financial uncertainties, there has been a record jump in tractor sales. Tractor sales rose 52 percent in the month of June during pandemic and lockdown and tractor production is also at its 20-month high. This is when the tractor loan in the country is more expensive than the loan on the Mercedes car.
According to Tractor and Mechanisation’s data, in the first quarter of the year i.e. April to June, a total of 1,75,964 tractors were sold. Among these, 98,648 tractors were sold in June alone, 64,860 tractors in May, and 12,456 tractors in April.
5,760 tractors were exported in June, 4,419 in May and 629 in April. During this period 1,65,156 tractors were sold in the domestic market, which is 16% higher than the previous year.
Between 1961–62, before the Green Revolution, 880 tractors were produced nationwide which increased to close to nine lakhs in the year 2018–19. Along with this, India is also considered to be the largest tractor producer in the world. At the same time, India also exported 92,000 tractors to African and ASEAN countries. Among them, Mahindra & Mahindra is at the top due to its cheap tractors, which holds a 40% market share.
Experts believe that due to good monsoon, there is a boom in tractor sales. Also, record production of rabi crops and high sowing of Kharif crops are included in the reason for record sales. If tractor sales continue to grow at the same pace, industrial growth is expected to grow by five percent by the end of the year.
It is evident that the demand for tractors is also benefitting the companies making tractors. According to the data, Sonalika tractor sales have increased the most. In June alone, Sonalika tractor sales grew by 47.8 percent, while Mahindra and Mahindra also registered a 10 percent increase in tractor sales.
But there is another aspect behind this increased tractor sales graph. Buying a tractor in the country is more expensive than buying a Mercedes-Benz car. Country’s largest bank, State of India, lends money at 8% interest for the purchase of a Mercedes car, the farmer lends it at 11% to buy a tractor.
If the government pays attention to this sector and provides loans for tractors to farmers at low interest, then not only agricultural production but the auto sector can also get a boost.