Mahindra to hike tractor prices; sees growth potential in farm equipment segment
In an interview with CNBC-TV18, Hemant Sikka, President-Farm Equipment Sector, Mahindra & Mahindra, said that the company is planning to increase its price in the tractor segment. He also mentioned that the farm equipment segment is likely to grow as he expects a good agricultural season ahead.
In March, Mahindra & Mahindra (M&M) saw a 45 percent rise on a month-on-month (MoM) basis in tractor sales. To understand the outlook buoyancy in the tractor space, CNBC-TV18 caught up with Hemant Sikka, President-Farm Equipment Sector, Mahindra & Mahindra.
Sikka affirmed that March shaped out well for the entire auto industry. Going ahead, he expects the whole tractor industry to do very well. He believes agricultural season will be very good, and he is already seeing a lot of buoyancy in the market.
"The month of March shaped out very well for the industry and especially for us in Mahindra. We did pretty well. So overall, we are seeing that the industry ended on a very good note and going forward, as we enter into this main season for the agriculture sector, we are looking at a very good season ahead of us," he said.
He anticipates a lot of growth potential in the farm equipment segment within M&M.
"The farm implement segment is a big thrust area for us; we believe there is a lot of growth potential there for the farm equipment sector for us to grow within M&M," he added.
"We are seeing a lot of buoyancy in the market. We are seeing renewed demand for tractors coming up, very strong production we are seeing and this is giving us a lot of confidence that going into this very important season for the tractor industry, I think the whole tractor industry will do very well," he added.
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On price hikes, he said that the company took three last year and plans to increase prices this year as well. He explained that since commodity prices have been on a tear in the last 18 months, another price hike will happen in the next few weeks in the tractor segment.
"The commodities have been on a tear for more than 18 months. We were quite okay getting into this New Year, but we have seen that the prices have not moderated; the commodities are still on a very strong roll-up and all of this cannot be passed on in one go," he mentioned.
"So, we took three price increases last year, we intend to take more price increases this year to pass on this huge inflation that we are seeing on the input cost. We have to space it out because we also have to see that our farmers are able to absorb these increases, but I think overall, we have played the price game in a very mature way passing on three times last year and again, another price increase may happen in the next few weeks," Sikka said.
Watch the video for the full interview.
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(Edited by : Dipikka Ghosh)
First Published: Apr 11, 2022 1:26 PM IST
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