India is an agriculture-based economy and the tractor industry plays an important role in the Indian agricultural sector. Though the Indian tractor industry is young with the manufacturing process starting in 1961-62, it has now become the largest market worldwide. Presently, there are 13 major players in the industry, with Mahindra & Mahindra being the leader. In recent years, the industry has registered a good sales growth—both domestic as well as exports—partly because of the government initiatives to boost agriculture and the agricultural machinery industry. This study gives an insight into the tractor industry in India, analyzes the current sales scenario of tractors, and forecasts the sales for the year 2012-13, including sales forecast for 13 different states. The study was done using the statistical package MINITAB. The most appropriate ARIMA models have been developed and used for forecasting. The findings show that the industry sale in volume for 2012-13 is forecasted to grow at 30.4% compared to 2011-12 sale volume.

The Indian tractor industry has around 13 national players and a few regional players. It is dominated by Mahindra and Mahindra (M&M) with a market share of around 41.1%, followed by Tractors and Farm Equipments (TAFE) which holds around 22% of the market. The other major players include Escorts (12.1%), L&T-John Deere (7.8%), and International Tractors Limited (8.9%). During the last few years, the industry has seen some consolidation, with M&M acquiring Punjab Tractors (PTL) and TAFE acquiring Eicher Tractors. Most of the tractors sold in India are in the 21-50 HP range, with the 31-40 HP category alone accounting for 50% of the sales.

In terms of volume, India is one of the largest tractor markets in the world, besides China and the USA. The prospects of domestic industry are highly linked to monsoon rains which remain a key factor in determining agricultural production. Better irrigated states like Punjab and Haryana have a high tractor density (over 100 per 1,000 ha), while Rajasthan, Gujarat, Himachal, Tamil Nadu, Maharashtra, Andhra, Madhya Pradesh and West Bengal have low levels of tractor penetration—a pointer to the substantial growth potential that the latter set offers. On an all-India basis, tractor penetration remains low at around 13 per 1,000 ha. Besides their use in farming, tractors find application in activities such as harvesting and irrigation, land reclamation, drawing water and powering agricultural implements. In addition, lately, the tractors are also being used for non-agricultural purposes including haulage in construction and infrastructure projects, which has expanded the tractor market. The Indian tractor market, thus, is expected to grow in the future and remain one of the biggest tractor markets in the world.

Marketing Management Journal, Sales Forecast, Indian Tractor Industry, Mahindra and Mahindra (M&M), Tractors and Farm Equipments (TAFE), Punjab Tractors (PTL).