Share of motorcycle in exports from India is at 89%, scooters occupy remaining share (11%) with mopeds
occupying minimal share as on fiscal 2020. Bajaj leads exports of two-wheeler from India with a share of 53%,
followed by TVS at 19%, Honda at 9%, Yamaha at 8%, Hero at 5% and Suzuki at 3%.

Tractors

Tractor sales are highly dependent on agriculture incomes, which is dependent on the monsoons. Hence,
fluctuation in sales is higher than other automobile segments.

Over fiscals 2015-2020, domestic tractor sales logged 5.2% CAGR. In fiscals 2015 and 2016, weak monsoon
restricted tractor demand.

The sales revived in fiscals 2017 and 2018, rising 19% and 22% on-year, respectively, on the back of a normal
monsoon with good spatial and temporal distribution. In fiscal 2019, the pace tapered to 10% and in fiscal 2020,
the sales de-grew 10% on a very high base of fiscal 2019.

The government announces food grain procurement prices, also known as minimum support price (MSP), to
protect farmers from price volatility in the market. This ensures steady income for them. The government has
consistently raised the MSP for major crops such as wheat, rice, sugarcane and cotton from fiscal 2007. This, too,
supported the tractor segment.

Review of domestic tractor sales

 

1000 mmm Tractor domestic sales —@®=y-o-y Growth 22% - 25%
19%
20%
800
8 15%
3S 600 10%
3 5%
Z 400 0%
-5Y
3 200 Si
2 -10%
e
0 -15%
Fy15 FY16 FY17 FY18 FY19 FY20
Source: CRISIL Research
Tractor industry records a bumper growth of 41% in Q2 FY21
250 50%
~ 40%
200 -
8 30%
5 150 20%
s
> 100 10%
3
§ 0%
2 50
3 -10%
=
Fr O ~ -20%
Qi Q2 Q3 Q4 Qu Q2
FY 20 Fy21

smma Tractors ==

-y growth (%)

 

Source: CRISIL Research

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