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Tractor Sales will be weak Next Year

As per ICRA reports, tractor sales will be weak in coming year due to weak monsoon.

Besides, any recovery in volumes is only likely to happen over the medium term, ICRA reports.

Moreover, report says, "Late precipitation, coupled with contingency plans prepared for a majority of districts, may help curtail the impact of a deficient rainfall, the short-term demand drivers for the domestic tractor industry remain weak,".

Unfavourable kharif crop in 2014, crop damage due to unseasonal rainfall in feb-march 2015 and weak monsoon in the year of 2015 might prove reasons for lowering tractor sales.

Domestic tractor market sales continue to be sluggish with the industry showing no signs of any recovery so far. After declining by 13 per cent during FY15 owing to a host of unfavorable factors, the domestic tractor industry volumes have continued to be under pressure, declining for an eleventh consecutive month in August 2015 (21 per cent y-o-y decline), resulting in a decline of 16.4 per cent y-o-y in April-August, FY16.

The farm sentiments have been further weakened due to numerous adverse short-term demand drivers, which include stressed farm cash flows on account of lower rabi harvest in Q1 FY16, a second consecutive year of weak south-west monsoon as well as only a modest increase in MSPs of various crops.