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India's Apr-Oct tractor sales jump 42.6 pct
Tue Nov 30, 2004 04:44 AM ET
NEW DELHI, Nov 30 (Reuters) - India's tractor industry, the world's biggest by unit sales, reported a 42.6 percent rise in shipments in the first seven months of this business year to March 2005, industry data showed on Tuesday.
Data from the Tractor Manufacturers' Association (TMA) showed the combined sales of 12 manufacturers in April-October jumped to 140,181 units from 98,327 in the same period a year ago.

The rise in sales was spread across all horsepower segments.

India's economy, Asia's fourth-largest, is agriculture-dependent and farmers are increasingly employing tractors to improve crop yields and output.

More than a dozen firms make tractors in India, including global firms like New Holland, a unit of CNH Global N.V. (CNH.N: Quote, Profile, Research) (CNH.BE: Quote, Profile, Research)

Sales have been helped by the scrapping of a 16 percent production tax on tractors from July's federal budget and a series of fiscal measures aimed at boosting rural investment.

But the simultaneous withdrawal of benefits from a modified value-added tax on raw materials and parts used by the industry restricted benefits from the tax cuts to less than 4 percent.

TMA's data showed tractor sales in the 21-30 horsepower segment rose 35.7 percent in April-October, sales in the main 31-40 horsepower (hp) tractor segment jumped 39.5 percent while they rose 43.1 percent in the 41-50 horsepower segment.

India's tractor sales rose 10.9 percent to 190,348 units in the past business year to March 2004 as the country's best monsoon rains in a decade in 2003 boosted farm output by 9.1 percent and lifted rural incomes.

Indian farmers are heavily dependent on the annual southwest monsoon rains since only a third of cultivated land is irrigated. Agriculture accounts for 22 percent of India's gross domestic product and supports 60 percent of its billion-plus people.

Despite early monsoon showers, this year's June-September monsoon was erratic and farm output growth in 2004/05 is unlikely to exceed 1.5 percent, a government paper has said.

Even though tractor sales rose sharply in April-October, full year sales are still likely to be well below a peak of 269,000 units reached in 1999/2000.

Tractor sales fell for three straight years through 2002/03 as farm incomes were hurt by surplus crop output in 2001/02 and a severe drought in 2002/03.

Even though India is the world's largest tractor market, average tractor sizes are smaller than those in Western countries due to the small average size of land holdings in the country.

Sales (in number of units) ---------------------------------------------------------- Company Apr-Oct04 Apr-Oct03 % change Market share ---------------------------------------------------------- Bajaj Tempo 1,777 1,846 -3.74 1.27% Eicher 10,117 8,062 25.49 7.22% Escorts 20,144 12,430 62.06 14.37% HMT

3,643 2,581 41.15 2.60% L&T JD

7,908 4,546 73.96 5.64% Mah Gujarat 1,432 985 45.38 1.02% M&M 37,493 26,461 41.69 26.75% New Holland 6,058 4,320 40.23 4.32% Punjab TL 16,998 13,434 26.53 12.13% Sonalika 15,000 10,072 48.93 10.70% TAFE 19,085 13,343 43.03 13.61% VST 526 247 112.96 0.38% ---------------------------------------------------------- Total 140,181 98,327 42.57 100.00% ----------------------------------------------------------

Bajaj Temp - Bajaj Tempo Ltd. (BJTM.BO: Quote, Profile, Research)

Eicher - Eicher Ltd. (ECTR.BO: Quote, Profile, Research)

Escorts - Escorts Ltd. (ESCO.BO: Quote, Profile, Research)

Gujarat TCL - Gujarat Tractor Corporation Ltd.

HMT - Hindustan Machine Tools Ltd. (HMTL.BO: Quote, Profile, Research)

L&T JD - Larsen & Toubro John Deere (LART.BO: Quote, Profile, Research) (DE.N: Quote, Profile, Research)

M&M - Mahindra & Mahindra Limited (MAHM.BO: Quote, Profile, Research)

PTL - Punjab Tractors Limited (PTRA.BO: Quote, Profile, Research)

Sonalika - International Tractors Ltd.

TAFE - Tractor and Farm Equipment Ltd.

VST - VST Tractors Tillers Ltd.

© Reuters 2004. All Rights Reserved.
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