The Hindu Business Line : Tractor industry buoyant

DESPITE a sub-normal monsoon and hence concerns over an adverse impact on the growth of the tractor industry, tractor manufacturers have revised their targets for the year upwards.

"The industry has set a target of 2,30,000 units this year. Two months ago, it expected to clock 2,15,000 units. The late rains, however, helped correct the depressed sentiments that had arisen due to the shortfall", Mr R.C. Jain, President, Tractor Manufacturers Association (TMA) and Vice Chairman, Eicher Group, said.

In fact, the tractor market has grown 45 per cent in the April-August 2004 period, with some key States such as Gujarat and Rajasthan seeing upwards of 100 per cent growth. States such as Madhya Pradesh, Maharashtra and Tamil Nadu too have grown by upwards of 50 per cent, with only Punjab seeing negative growth. Exports of tractors too went up by 41 per cent.

``The growth in the second half of the year, however, will be lower due to a higher base last year,'' Mr Jain said.

Meanwhile, in a bid to improve the industry's financial health, the TMA in a meeting held on Tuesday decided that its members would completely halt the practice of advance selling, that is, selling tractors on credit, effective October 1. The association also decided that companies should reduce their overall receivables to 15 days by the end of the current fiscal year. At present, some tractor companies have receivables of around one month.

The association has also decided to form a sub-committee to coordinate with the Government on setting up modern infrastructure for the tractor industry. It has asked for the upgradation of the existing testing facility in Burni as well as another new testing facility.