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Tractor sales drop

April 20, 2019

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KARACHI: Tractor sales started recovering slightly from January but were unable to boost cumulative sales figures during the first nine months of FY19 which remained low at 37,421 units versus 52,067 units in the same period a year ago.

Data from Pakistan Automotive Manufacturers Association (Pama) suggests positive recovery in 2019 as Massey Ferguson sold 1,950 units in January, followed by 2,412 units in February and 3,078 units in March. Al-Ghazi’s New Holland sales in January 2019 stood at 1,492 units, rising to 1,596 in February and 2,628 in March. The tractor industry suffered massive sales drop in Oct-Dec 2018, resulting in huge lay off of contract and daily wage workers in the vending sector.

Al Ghazi kept its plant closed for many weeks in the last quarter of 2018 owing to plant maintenance and unsold stocks at the plant and sales centres.

Talking to Dawn, CEO Al Ghazi Tractors Shahid Hussain said, “We have seen some movement in the market despite a 35 per cent downturn compared to January-March 2018. There is considerable slowdown,” he said.

The industry is suffering from a plethora of issues including the long outstanding sales tax refunds which has led to a severe liquidity crunch.

Talking about the upcoming budget 2019-20, he said, “We proposed mobilisation of Zarai Taraqiati Bank Limited (ZTBL) to act as a catalyst offering loans to farmers at easy terms rather than announcing usual tractor schemes that favour the middlema.” The amount designated for such schemes – if diverted as a mandate and pool money to ZTBL to dish out easy term loans as proposed – could bring out multifold benefits and speed farm mechanisation, he said.

Former chairman Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam) Mumshad Ali said his company has rehired 125 people who were laid off from two plants in Jan 2019 owing to suspension in parts procurement by tractor makers in Nov-Dec 2018. “We have not received good orders from assemblers for parts supplies. May and June will also remain depressed due to Ramazan and Eid holiday,” he said. He added that 2018-19 will end on a negative note as the sector remains bogged down by sales tax refund and lowering sales issues.

Co-Convenor Tractor Committee Paapam, Rana Mansoor Qadir said only six workers have been rehired out of the five fired earlier on following improvement in sales from January 2019 onwards. He recalled that in previous years, tractor production was lower by 10-15pc in Ramazan and this trend is likely to continue this year too.

Published in Dawn, April 20th, 2019