Robust demand for higher HP tractors

June 24, 2014 11:12 pm | Updated 11:12 pm IST - CHENNAI:

The Indian tractor industry is undergoing a structural metamorphosis with increasing demand towards higher HP (horse power) tractors from medium ones.

A combination of factors ranging from multiple usage possibility to rising affordability has seen stepped up demand for higher horse power tractors.

As the farm mechanisation continues to rise due to lack of farm labours in the country, growth in niche and higher power segments are also being witnessed. Though the hard soil condition is touted as a key reason for rising demand for bigger (41-50 HP) tractors, increased usage in non-agri segment such as infrastructure and construction fields have also contributed to the rise in demand in this category.

Crisil Research’s Director Ajay Srinivasan pointed out that high crop realisations over the past 5-7 years (on the back of a CAGR of 10-15 per cent in minimum support prices), increasing commercial usage, and growing trend in collaborative farming had driven a shift towards higher HP segments.

“In 2013-14, the 41-50 HP segment comprised almost half of domestic tractor sales volumes. Realising the benefits of higher productivity that is increasingly leading to the use of implements along with tractors, farmers are prefering 41-50 HP tractors,” he added.

T R Kesavan, President, Tractor Manufacturers Association, said that 41-50 HP recorded a higher growth of about 29 per cent when compared with overall tractor industry growth of 20 per cent in 2013-14.

“Higher HP tractors are required for harvesting applications extensively and in hard soil conditions,” said Rajesh Jejurikar, Chief Executive, Farm Equipment and Two-Wheeler Division, Mahindra & Mahindra Ltd., adding, “Choice of horse power in a tractor is directly linked to various factors such as topography, soil type, crop pattern and availability of irrigated land.’’

Industry experts are of the view that 41-50 HP segment is here to stay, and may see creation of some sub-segments.

It would continue to grow at higher than industry rate due to favourable growth drivers.

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