Tractor Ancillaries Driving in the High-Growth Lane - Business

At a time when most of the industrial clusters in and around Chandigarh are facing tough times due to the global economic deceleration, the tractor ancillaries in the region have managed to defy the downturn blues and have clocked an impressive growth.

SME tractor parts suppliers in Chandigarh have put the bad times behind them, which they had to witness due to the poor demand and sluggish sales. The high demand being generated in the domestic market over the last few months has made them upbeat about their growth prospects in the near-term.

Order book reflect robust growth

According to the data compiled by the Tractor Manufacturers Association, the tractor ancillary industry has registered a growth of 9% in April-August 2009, indicating that the current financial year has been quite promising for the small units in the sector.

SME tractor ancillaries that cater to big tractor manufacturing companies such as the International Tractors Limited (ITL), Hoshiarpur; HMT Tractors Limited, Pinjore; and Mahindra & Mahindra Swaraj Division, Mohali, are receiving good orders this year.

"The order book of the small-scale tractor ancillaries in Chandigarh suggests that good times lie ahead for the small-scale tractor ancillaries. Going by the existing scenario, it seems that most of them in the tractor ancillary sector will post good performance in the current financial year," said Abhinav Sharma, senior engineer at Sai Tractors, a tractor parts manufacturer in Chandigarh.

The impressive 9% growth for tractor ancillary segment has largely been attributed to the recent developments in the farm sector, which has boosted their margins and prompted them to make heavy purchases for better ancillaries this year.

"Revision in the minimum support prices (MSP) of agricultural crops as well as remunerative prices offered to agriculturists due to market forces have helped them to opt for greater farm mechanisation. This has, in turn, triggered a rise in demand for tractors in the domestic market," said Ajeet Singh, spokesperson of Adarsh Udyog, a small-sized tractor parts supplier in Panchkula, Punjab.

The rise in demand is also prompting several small players to add new capacity and revamp their operations to meet the increasing orders of their mother units. Given the growth path treaded by the sector, experts believe that the SME tractor ancillary industry in Chandigarh will soon be able to reach greater heights and capture a larger market share.

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