Steel Prices To Blame For Indian Tractor Prices
Indian equipment maker Mahindra & Mahindra Ltd said they will raise tractor prices in the next three months due to higher prices of steel, Reuters reports. The company’s statement comes after an official at smaller Indian rival Escorts Ltd said it would raise tractor prices, for the fourth time in 2008 and expect increases for 2009.
Mahindra expects tractor sales in India to post “high single-digit growth” this year, on the prospects of good monsoon rains and healthy farm output, the company said. In their last fiscal year, sales shrunk 5.1% as banks tightened financing.
The monsoon is a key growth driver for tractor sales as a lack of irrigation facilities in India makes agricultural output crucially dependent on the rains. Tractor sales in India are concentrated in the April-June and the October-December quarters, when sowing and harvesting takes place.
In the first four months of the year that began in April, overall sales have risen 11%, while Mahindra’s sales are up an annual 9%, a company spokesman said.