China turned out 462,991 small tractors in the first quarter of this year, dropping 13.8% year-on-year, and sold 456,345 units, down 12%, according to statistics from a network on 62 major small tractor production enterprises.

Market competition was getting fiercer and fiercer, making tractor manufacturers face more difficulties in operation.

The production and sales of small four-wheel tractors demonstrated a record nearly 20% decline in the first quarter in recent years. The output was 270,230 units, down 19.3% from the same period of last year, and the sales were 265,492 units, down 19.8%. Thanks to the high annual output during 1995-1999 period standing at 900,000-1,000,000 units, such drop is described as normal.

The production and sale of small-hp walking tractors were stable. The output was 118,762 units in January-March, rising 3.3%, and the sales were 124,685 units, up 16.9%.

The output of large-hp walking tractor was 66,605 units, down 7.7%, and sales, 59,319 units, down 15.7%, according to statistics from 23 production enterprises. Such level was about the same as that in the third and fourth quarters of last year.

At the same time, the 15 survey transportation tractor enterprises produced 7,394 units in the three months, down 36.2%, and sold 6,849 units, down 34.3%.

Of the 34 survey small four-wheel tractor enterprises, only six registered growth in output and sales, accounting for 17.65% of the total, while 28 showed drops in output and sales.

There were 10 enterprises with production and sales of small four-wheel tractors exceeding 10,000 units, to make a total of 225,281 units, down 16.7% as against 270,486 units in the same period of last year.

However, the market concentration rate was brought from 80.8% in January-March 1999 to 83.3% in the same period of this year.

For production of large-hp tractors, 15 enterprises registered decreases in production and sales, accounting for 65.2% of the total. Some two-thirds of small tractor enterprises had production and sales down, indicating a dull market.

The sale-production ratio of small tractors was 98.6% in the first quarter of this year, higher than the 97.2% in the same period of last year.

The sale-production ratio of small four-wheel tractors was 98.2% in January-March as against 98.8% in the same period of last year; and that of small and medium hp walking tractors was 105%, up 12 percentage points over the 92.7% in the same period of last year.

The sale-production ratio of large-hp walking tractors was low to only 89%, down 8 percentage points from the 97.7% in the same period of last year.

In the first three months of this year, most of the small tractors producers were in difficult situation, facing a fierce competition. The price kept dropping by 400-1,000 yuan each for small four-wheel tractors, and down 200 yuan for walking tractors.

But, due to the rural economy is undergoing a stage of readjustment, and grain prices have no hope of recovery, and the implementation of fuel tax policy, many rural people are holding a wait-and-see attitude. Industry insiders held that small tractor market is still in the period of readjustment which may last several years.