The auto industry is gearing up for transition from the Bharat Stage (BS)-IV emission norms to the BS-VI norms from April 1, 2020, and might impact sales of some vehicles. However, it will not have major impact on tractor sales and will be applicable only for heavy tractors.
“The revised emission norms will only be applicable for tractors with capacity above 50HP. This accounts for only 13 per cent of industry sales. We do not think, there will be any major impact on sales of tractors, unlike other segments,” said an official, Mahindra and Mahindra (M&M).
Rating agency ICRA also ruled out any immediate impact on domestic tractor sales. “The BS Trem VI regulation, which applies to diesel engine equipment including agricultural tractors and construction equipment will come into force from October 2020 onwards. The rest of the industry (tractors below 50HP) will migrate to the new norms only from October 2023,” the agency added.
Tractors sales have seen some improvement in January, after facing a slump for the last few months. As rainfall was delayed this year, pushing back the agricultural payments cycle, there was renewed interest in the purchase of farm equipment from November-December period to January. Leading manufacturers like M&M and Escorts both witnessed a rise in sales in January.
“The tractor demand is likely to see positive momentum, led by the expectations of a good Rabi output and the government’s renewed focus on rural sector through higher allocation as announced in the Union Budget. In the exports market, we have sold 787 tractors,” said Rajesh Jejurikar, president, farm equipment sector, M&M. According to FADA, tractor registrations were up by 5.1 per cent.
However, data on the inventory levels of the segments were not available. Meanwhile, experts have also ruled out a major hike in the price, given the price sensitivity. “Although tractor OEMs are yet to announce revised prices after incorporating the changes required for the stringent emission norms, complete pass-through of prices would be unlikely...” said Rohan Gupta, AVP, ICRA.