Annual Tractor Production Hits a Historic High in 2021

Strong domestic sales momentum in the first half of 2021, along with steady growth in exports in recent months, drove total domestic tractor manufacturing for 2021 to 1,065,280 units, the highest-ever yearly figure, up from 8,63,125 units in 2020. 

Total domestic sales increased by 13% to 9,03,724 units in 2021, up from 8,02,670 units in 2020, whilst exports increased by 61% to 1,24,901 units, the highest-ever annual export volume. Exports were 77,378 units in 2020. 

Tractors are one of the significant tools in agriculture machinery. Tractor production and domestic sales, on the other hand, fell to a 20-month low in December 2021. 

"Total domestic sales decreased by 27% in December 2021, to 44,428 units, from 61,249 units in December 2020." As per Tractor & Mechanization Association data, "on a sequential basis, December sales dropped 30% compared to November 2021 sales of 63,783 units". 

"This was the sixth month of poor tractor sales, which may be attributed to a relatively big base as well as a delayed harvest owing to uneven and lengthy monsoons. "As a result, rural sentiment has been rather restrained," said Shamsher Dewan, Vice-President and Group Head Of Corporate Ratings at ICRA. 

Overall production was less in December 2021, at 53,527 units, compared to 67,566 units in the previous month and 91,969 units in December 2020. However, the tractor exports surge persisted, with shipments increasing by 7% to 11,186 units in December 2021, up from 10,491 units in December 2020. 

According to Hemant Sikka, President-Farm Equipment Division, Mahindra & Mahindra Ltd, that also reported a 21% drop in December tractor sales, "de-growth in sales in December has been driven by a combination of factors, such as the high base of last year and both delayed and very torrential rain in some geographic regions." 

"We anticipate a 2-6 percent drop in tractor sales in FY2022. "However, medium-term drivers remain favorable, aided by consistent support for the farming sector and an expanding mechanization trend," Dewan added.