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Tractor wholesales declined 10-12 per cent year-on-year for the second consecutive month in October, even as retail registrations continued to show healthy growth during the ongoing festive season, highlighting a divergence between consumer demand and manufacturers' dispatches, according to a Jefferies report.
The report said tractor registrations increased 17 per cent year-on-year during the first 21 days of the festive season, while registrations in the first half of FY27 (April-September) had grown 18 per cent. However, wholesale volumes, including exports, declined 10-12 per cent year-on-year for Escorts Kubota and Mahindra & Mahindra (M&M) in October. Jefferies stated, Tractor registrations are up a healthy 17 per cent YoY in festive so far (1H: +18 per cent), but wholesales, including exports, declined 10-12 per cent YoY for ESC and MM (tractor segment) on high base and weakening demand. The report attributed the decline in tractor wholesales to a high base and weakening demand. The contrasting trends in registrations and wholesale dispatches indicate that the improvement seen in retail registrations has not translated into higher manufacturer sales during the period. M&M reported total tractor sales of 64,846 units in October, compared with 73,660 units in the corresponding month last year, registering a decline of 12 per cent. Its domestic tractor sales fell 13 per cent to 62,626 units from 72,071 units a year ago. However, the company's export tractor sales increased 40 per cent to 2,220 units in October, compared with 1,589 units in the year-ago period. Despite the October decline, M&M's cumulative tractor wholesales during the first seven months of FY27 remained higher than the previous year. The company sold 338,914 tractors during the period, up 2 per cent from 330,685 units in the corresponding period of FY26. The report's broader assessment also showed a moderation in tractor wholesale growth. The segment recorded 18 per cent growth in FY26, which slowed to 8 per cent in the first half of FY27. Jefferies' October industry estimate showed tractor wholesales declining 13 per cent year-on-year. The divergence between retail registrations and wholesale volumes remains a key indicator to watch for the tractor industry as the festive season progresses. While registrations have maintained positive growth, the decline in dispatches points to continuing pressure on wholesale demand. (ANI)
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