Tractor sales go down

KARACHI: Tractor manufacturers have slowed down their production owing to continuous decline in sales. As a result, the vendors are perturbed over thin procurement of parts by the local industry.

Sale and production of Fiat tractors dipped to 1,622 and 1,714 units in July-September 2013 as compared to 5,339 and 3,489 units in same period of last year. Sale and production of Massey Ferguson tractors also fell to 4,556 and 3,281 units as compared to 6,094 and 4,782 units, figures released by Pakistan Automotive Manufacturers Association (Pama) revealed.

“We have lowered our production by around 30 per cent besides proportionately curtailing scheduled to vendors for parts procurement,” Senior Executive Director, Millat Tractors Limited, Sohail Bashir Rana told Dawn from Lahore. He added that the company has also unsold stocks of tractors parked at the factory.

He attributed the crises of the tractor industry to the farmers’ reluctance owing to high input costs, hike in diesel prices, fertilisers, utility prices, etc which had affected the purchasing power of the farmers. Besides, new orders were also not arriving from flood-hit farmers, he added.

However, he said that the company has not off-loaded any workers and staffers so far in view of lingering production and sale crises from July onwards.

“Why would a farmer purchase a tractor at company’s retail price when he has the option of buying farm machines at reduced rate from the lot of subsidised tractor scheme,” Sohail Bashir said.

Farmers are lifting tractor at Rs50,000-100,000 less from the open market instead of purchasing from the manufacturers. The government had given subsidy of Rs200,000-300,000 on various tractors.

Chairman Papaam Usman Ahmed Malik feared more crises in case the government raises sales tax by 5 to 7pc from January 2014 from the current 11pc. Few years back there was zero per cent sales tax on tractors.

He claimed that many vendors had discharged workers by about 20-30pc from July till to date. He said that despite raising the GST, the government is also not getting desired revenue in terms of sales tax due to depleting sales. Tractor prices had surged by Rs100,000-200,000 a unit this year depending on engine horse power after imposition of 11pc GST.

Car sales rise: Sale of locally produced cars in July-September 2013 improved to 28,539 units from 26,806 units thanks to rising sales of Honda and Suzuki cars. Toyota Corolla sales also slightly improved to 7,109 units from 7,032 units while Honda Civic and City sales jumped to 2,776 and 3,528 units from 1,485 and 2,936 units.

Suzuki Swift and Mehran sales plunged to 1,396 and 7,182 units from 1,902 and 7,383 units. Suzuki Bolan and Cultus sales grew to 3,167 and 3,351 units from 2,613 and 3,330 units.