Lubes producers may benefit from growing tractor sales, but the market remains volatile.
According to reports from the 2nd ICIS Indian Base Oils & Lubricants Conference, the lubes producers are set for bumper years for sales to India's tractor owners. Yet, results from the nation's largest tractor manufacturer show just how volatile the market can be.
Mahindra - pulling the tractor market Image: Mahindra |
Gulf's Oil's President and CEO, Ravi Chawala, whose speech at the conference was reported by Lube Report Asia, is confident the nation's tractor parc is set to continue rising exponentially over the next few years.
As the world's third largest market for tractor sales, that's certainly good news for lubes producers who, according to Gulf, provided 120m litres of product to owners in 2013 with the majority of oil changes being carried out by independent workshops.
However, this optimism was presented with a post-conference reality check when Indian manufacturer - and the country's top supplier by some considerable margin - Mahindra & Mahindra reported a 10% drop year-on-year for April tractor sales. Just under 20,000 units were sold this year, against more than 22,000 in April 2013. However, this likely to be a short-term dip on a highly weather-dependent sector.
Mahindra has also set it sights on overseas markets, despite seeing a year-on-year 17% fall in exports for the month of April. Mahindra is making no secret of its desire to conquer the lucrative US market and take on its nearest global rival, John Deere. Whatever the outcome, it can only be good news for lubes suppliers in the long-term.