Tractor output surpasses 1 million in 2022 for the second year in a row
In 2022, the number of tractors made each year was over a million for the second year in a row, but that was 6% less than the year before. Domestic sales increased somewhat despite a strong base impact. Exports increased by 6% in 2022, reaching their greatest level in history.
Demand for tractors on the local market stayed strong in 2022. This was helped by the fact that farmers had a lot of money because the monsoon was better than usual, and exports kept growing. This follows a record-breaking sales year in 2021.
Total domestic tractor output in 2022 was 1,004,976 units, up from 1,065,280 units in 2021, the highest-ever yearly total.
According to information released by the Tractor & Mechanization Association (TMA), total domestic sales increased slightly to 912,061 units in 2022, up from 903,724 units in 2021. Meanwhile, exports grew by 6% to 131,850 units, the highest annual export amount ever, up from 124,901 units in 2021.
Hemant Sikka, President, of the Farm Equipment Industry, Mahindra & Mahindra Ltd., stated that attitudes in the farming sector remain positive, resulting in robust demand for tractors and farm tools.
Mahindra & Mahindra, India’s leading tractor manufacturer with a little more than 40% market share, projected a 4% growth in 2022 to 371,848 units from 359,417 units.
‘Farmers are gradually realizing that farm mechanization is the way forward for improved production and consistent income in the existing agro ecosystem,’ stated Raman Mittal, Joint Managing Director, Sonalika Tractors.
Even though December 2022 had the second-lowest amount of production for the year, both production and domestic sales went up from the year before, while exports went down.
Total domestic sales in December 2022 were 55,782 units, up from 44,428 units in December 2021.
Total tractor output increased to 59,106 units, up from 53,527 units in 2021. Exports fell to 10,489 units from 11,186 units.
According to Rohan Kanwar Gupta, Vice President & Sector Head – Corporate Ratings, ICRA, sector volumes are expected to remain strong in the March 2023 quarter as well, boosted by favorable underlying drivers for rural cash flows.
Also, the new emission rules for tractors with more than 50 horsepower (Bharat Stage TREM IV), which have been delayed several times, go into effect this month. The revised Bharat Treaty IV rules require considerable technology upgrades to limit pollution.
While most countries have already adopted emission rules, the world’s two largest markets, India and China, have trailed behind Western nations.
According to the rating agency ICRA, the Indian tractor industry’s shift to updated emission requirements could result in a 10-15% rise in the cost of tractors with more than 50 HP.
India, on the other hand, is still a market for tractors with 30–50 HP, which account for more than 80% of all sales. Only 8–10% of industrial volumes will be affected by the new rules. The other 92% will still be governed by the Bharat Stage TREM IIIA norms.