Deficient rainfall in August and excess rainfall in September, both not good for standing crops, are the reasons why the tractor industry showed a decline. However with the festival season around the corner, sales are picking up this month, said Antony Cherukara, CEO of VST Tillers Tractors.
VST Tillers Tractors posted a mixed set of sales in September. Power tiller sales grew nearly 9 percent year-on-year (YoY) but tractor sales were under pressure, contracting over 20 percent.
“In August, we saw the deficient rainfall and in September, we saw excess rainfall, both these conditions are not good for the standing crops. That is one reason why the tractor industry showed a decline in August and September, but with the festival season, sales picking up this month and going forward with Diwali, we expect things to be better for the tractor industry,” he said.
The tiller segment is growing at nearly 20 percent and he expects that to continue.
In terms of growth for the entire year, he stated, “The first half of the year for the tractor sector has remained flat because two bad months of August and September, but we are expecting that to pick up in the second half. So, looking at about 10-15 percent projections for the tractors and upwards of 20 percent for the tiller segment.”
The company has entered into a product development agreement with Czech-based company Zetor Tractors.
“Next financial year we will be launching those tractors. It is with a company called Zetor Tractors from Czech Republic. Zetor had an early entry in India with the SMP and that's the same company we are talking about. They specialise in higher horsepower tractors and that's why we have collaborated with them,” he said.
On margins, he said iron ore and steel have gone down in terms of prices, however, the other commodities still have not gone down. “So, we are expecting that the sheet-metal and castings will show a decrease in prices and the other commodities will continue, but it's still a bit unpredictable at the moment,” he explained.
For the full interview, watch the accompanying video.