M&M chief executive, Tractor and Farm Mechanization Business, Bishwambhar Mishra said industry’s growth would be about 13% in current fiscal, much lesser than what it was in last fiscal, on account of rising lending rates, less hike expected in minimum support price of various crops and increase in labour cost
Chandigarh: Farm equipment major Mahindra & Mahindra (M&M) on Thursday said it would raise tractor prices by 1.5% soon in the wake of spiralling input costs, reports PTI.
“We will raise price of our products (tractors) by 1.5% in a month or so,” M&M chief executive, Tractor and Farm Mechanization Business, Bishwambhar Mishra told PTI.
Asserting that the company has not been passing on the full impact of rising cost by absorbing major portion of rise in cost, he said that there was now need to pass on some portion of cost to consumers by raising rates of tractors.
He pointed out that only material cost for the company had risen in the range of Rs45,000 and Rs50,000 per tractor in last two years.
M&M raised tractor rates by Rs5,500 per unit in the month of June this year, he said.
Asked about expectation on tractor industry’s growth, Mr Mishra said industry’s growth would be about 13% in current fiscal, much lesser than what it was in last fiscal, on account of rising lending rates, less hike expected in minimum support price of various crops and increase in labour cost.
“We think the growth of tractor’s industry will remain 13% compared to 20% achieved in last fiscal,” he said.
During April till August in current fiscal, tractor segment witnessed growth of 16.9%. “But we do not expect this growth momentum to continue in second half of current fiscal,” he said.
The tractor industry grew by 20% in 2010-11 and 30 per cent in 2009-10 while size of tractors was expected to be 5.35 lakh units in current year.
Asked about company’s growth expectations, Mr Mishra said that M&M would perform better than the industry’s overall growth. “Our growth will be more than the industry’s growth in current fiscal,” he said without divulging the figure.