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Market Size and Trends

The agricultural tractor market is estimated to be valued at US$ 83.56 Bn in 2024 and is expected to reach US$ 122.66 Bn by 2031, growing at a compound annual growth rate (CAGR) of 5.6% from 2024 to 2031.

Agricultural Tractor Market Key Factors

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Large agricultural activities across Asia Pacific and Latin America are driving the demand for high-powered and advanced tractors. Government initiatives and increasing mechanization in developing countries to raise productivity are pushing the sales of tractors. Moreover, the growing demand for food owing to the increasing population globally will promote higher agricultural production and farm mechanization using tractors. The adoption of precision farming and autonomous tractors could open new opportunities for market players in the coming years.

Mechanization of Agriculture

With the increasing population worldwide, the demand for food grains has also risen dramatically over the past few decades. However, agricultural land is limited and there are constraints to increase the cultivated area further. At the same time, labor costs in agriculture have been steadily increasing as more job opportunities emerge in other sectors of the economy. These factors have put pressure on farmers to boost productivity and maximize output from the existing cultivated land. Mechanization of agriculture operations is seen as a promising way to address these challenges.

Agricultural tractors have become indispensable for plowing large tracts of land for sowing various crops. They enable timely farming operations and ensure optimal crop production. The heavy duty engines and advanced transmission systems in modern tractors allow farmers to plow larger areas at a much faster rate compared to traditional manual methods or use of bullocks. This directly enhances land and labor productivity. Mechanized farming using tractors fitted with seed drills, rotavators, and other farm implements minimizes manual intervention and saves labor costs. It facilitates timely sowing and other inter-cultural operations which is critical for higher yields. Furthermore, tractors are versatile machines that support many farming activities beyond primary tillage such as harvesting, transportation, and irrigation.

The rising farmland sizes with infrastructure development like irrigation projects and consolidation of land holdings in major agricultural economies has stimulated mechanization. Small and marginal farmers are also increasingly adopting tractors on contract or custom hiring basis to optimize production from their limited land holdings. Government schemes that promote farm mechanization through subsidized purchase or custom hiring services have further encouraged tractorization. If used judiciously with correct farm implements, tractors ensure the consistent quality of farm operations which leads to increased and assured crop output every season. This enables farmers to boost their incomes as well as feed a burgeoning population. The agriculture tractor market is thus propelled by the pressing need to boost agricultural productivity through mechanization on a large scale globally.

Market Concentration and Competitive Landscape

Agricultural Tractor Market Concentration By Players

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Precision Farming and Technology Advancements

New technologies are revolutionizing agriculture by bringing unprecedented precision to various farming operations. Precision farming refers to a management concept employing advanced technologies like Global Positioning System (GPS), geographic Information System (GIS), sensors, and software to precisely manage intra-field variations in soils, topography, and micro-climates. It helps fine-tune the use of inputs like seeds, fertilizers, water, and agro-chemicals based on precise field/crop requirements. 

Agricultural Tractor Market Key Takeaways From Lead Analyst

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Market Challenges: Rising material costs

Farmers' incomes have been declining in recent years, reducing their ability to purchase new tractors and farm equipment. Rising material costs also impact tractor manufacturers' margins. Strict emission regulations pose technical and cost hurdles. Additionally, fewer young people are entering farming, thereby shrinking the future customer base. Overall farm land numbers are declining in key markets like Europe and North America. This reduces the need for new tractor purchases.

Market Opportunities: Growing populations and rising incomes in developing nations are increasing the global demand for food

This drives the need for agricultural mechanization and modern tractors. Subsidies and financing schemes can boost affordability. New technology integration related to automation, robotics, Artificial Intelligence (AI), and precision farming opens up new segments. Demand is also increasing for specialized tractors tailored for niche applications.

Agricultural Tractor Market By Operation

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Insights By, Operation- Convenience of manual operation drives the highest market share

In terms of operation, manual contributes the highest share of the agricultural tractor market owing 71.4% in 2024 to its convenience and accessibility. Manual tractors are better suited for smallholding farms that require flexibility in operation and movement across fields. They allow farmers to navigate uneven terrains with more control compared to autonomous tractors.

Manual tractors do not require advanced training for operators and can be handled easily by most farmhands. This makes them a more viable option for smaller farms with limited capital budget for new equipment and employee training. Their simple mechanism also means repairs and maintenance tends to be less expensive compared to autonomous models.

Farming communities in developing countries rely heavily on manual labor for agriculture. Traditional manual tractors continue seeing strong demand as they integrate well into existing farming practices without necessitating changes to infrastructure or workflow. Younger farmers in these regions also learn tractor operation from older generations using manual models, making them a familiar and trusted option.

Insights By, Engine Power- Engine power of 40-120 HP maximizes versatility for medium-sized farms

In terms of engine power, the 40-120 HP segment captures the highest market share of 41.3% in 2024 as tractors in this range strike an optimal balance between capability and cost. They are suitably powerful for a variety of tasks across medium-sized farms without being overloaded or underpowered.

Tractors with 40-120 HP engines can efficiently plow fields, haul fertilizers and crop, and operate mechanized farm implements. Their versatility makes them worthwhile investments for farms cultivating an assortment of crops through different growth cycles.

The average land holding of family-owned medium farms typically does not exceed 50-100 hectares. Tractors in the 40-120 HP range are adequately powerful for sowing, tending, and harvesting produce within standard crop cycles on such land parcels. Their functional flexibility delivers high utility at competitive price points fitting medium farm budgets.

Insights By, Type- Dominance of ICE engines due to reliability and infrastructure compatibility

In terms of type, the Internal Combustion Engine (ICE) segment holds the leading market share owing to reliability concerns and infrastructure limitations surrounding electric/hybrid alternatives. Internal Combustion Engine (ICE) tractors have a proven track record of dependability in agricultural use cases over decades of practical experience.

Service networks for ICE engines and tractors are widespread even in rural areas. Parts availability and mechanics' expertise simplify repairs and minimizes downtime essential for time-sensitive farming cycles. In contrast, electric/hybrid systems have less established after-sales support structures globally.

On-farm charging remains a challenge for electric/hybrid tractors in many regions with unreliable electricity grids or lack of three-phase current supply. This inhibits the full utilization of their capabilities dependent on regular recharging. ICE tractors, on the other hand, can refuel easily using the abundant diesel supply chain optimized for agricultural and construction equipment.

Until battery technology improves further to match the long range and recharging quickness of liquid fuels, widespread adoption of electric/hybrid tractors may remain limited outside developed markets. ICE therefore dominates as the established powertrain system compatible with agricultural infrastructure globally.

Regional Insights

Agricultural Tractor Market Regional Insights

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North America has been the dominant region with 38.9% in 2024 in the global agricultural tractor market. The large land holdings and mechanization rate in the U.S. and Canada have fueled tractor sales. Farmers in the region rely heavily on tractors for a range of field activities from ploughing, planting to harvesting. Leading global tractor manufacturers like John Deere and CNH Industrial have a strong presence in the region catering to the replacement demand. The pricing of tractors in the region is generally higher compared to other parts of the world owing to higher specification engines that meet stringent emission norms.

While exports of fully-built tractors from North America have been limited, there is a large trade of components and engines to other markets. For example, engines manufactured in the U.S. are often used in tractors assembled in Latin America and Europe. The components industry has developed significantly in the region to support the local tractor production. With economic uncertainties slowing down tractor sales in recent times, manufacturers have invested in new product technologies, mechanization equipment, and precision farming solutions to augment revenues.

Another noteworthy market is Asia Pacific, which is currently the fastest growing region in the global tractor market. Countries like India, China, Indonesia, and Thailand have huge populations dependent on agriculture. Mechanization rates in these nations are lower than developed markets presenting significant room for growth. Local tractor manufacturers such as Tractors and Farm Equipment (TAFE) in India and YTO Group in China have established robust distribution and aftersales support catering to domestic demand.

The threat of low-cost imports from China had impacted the Indian tractor market for some time. However, with improving quality, ‘Make in India’ initiatives are now supporting indigenous brands. Growing contract farming and consolidation of land holdings are also propelling mechanization across Asia Pacific. Tractor exports from the region have been rising with Thai manufacturers sending products to Southeast Asian neighbors. While still developing, the components industry in Asia Pacific countries is improving globally to meet the demand of local Original Equipment Manufacturers (OEMs).

Market Report Scope

Agricultural Tractor Market Report Coverage

Report Coverage Details
Base Year: 2023 Market Size in 2024: US$ 83.56 Bn
Historical Data for: 2019 To 2023 Forecast Period: 2024 To 2031
Forecast Period 2024 to 2031 CAGR: 5.6% 2031 Value Projection: US$ 122.66 Bn
Geographies covered:
  • North America: U.S. and Canada
  • Latin America: Brazil, Argentina, Mexico, and Rest of Latin America
  • Europe: Germany, U.K., France, Italy, Russia, and Rest of Europe
  • Asia Pacific: China, India, Japan, Australia, South Korea, ASEAN, and Rest of Asia Pacific
  • Middle East & Africa: GCC Countries, South Africa, and Rest of Middle East & Africa
Segments covered:
  • By Operation: Manual and Autonomous
  • By Engine power: Below 40 HP, 40 HP–120 HP, 121 HP–180 HP, 181 HP–250 HP, and More than 250 HP
  • By Type: ICE and Electric/Hybrid
  • By Drive type: 2-Wheel Drive and 4-Wheel Drive 
Companies covered:

Agco Tractors (Fendt), Captain Tractors, Eicher Tractors, Escorts Tractors, Force Tractors, Gromax Agri Equipment Limited, John Deere Tractors, JCB, Kubota Tractor, Mahindra Tractors, Monarch Tractor Electric Tractor, New Holland Tractors, SDF, Sonalika Tractors, SOLECTRAC, Standard Tractors, and Swaraj Tractors

Growth Drivers:
  • Mechanization of agriculture
  • Precision farming and technology advancements 
Restraints & Challenges:
  • Rising material costs
  • Meteorological uncertainties affecting crops

Key Developments

  • In November 2022, VST Tillers Tractors Ltd is a company that specializes in the manufacturing and distribution of agricultural machinery and equipment. and ZETOR TRACTORS is a company that specializes in the manufacturing and distribution of tractors and agricultural machinery. introduced two top-notch tractors at the CII Agro Tech India 2022 exhibition. These tractors, falling into the 45 HP and 50 HP categories, are the result of collaborative efforts between VST and ZETOR, manufactured in their respective plants in India and the Czech Republic.
  • In July 2021, New Holland North America is a renowned company in the agricultural machinery industry rolled out the T7 Heavy-duty Tractor with PLM Intelligence as an addition to its range of agricultural tractors. This new tractor aims to enhance farmers' productivity by enabling multitasking across various field and transport operations.
  • In June 2022, Solis Yanmar is a company that specializes in manufacturing and distributing tractors and agricultural machinery. launched three new tractor models in the sub-30 HP category specifically for Turkish farms. These models, manufactured in India, are set to be exported to Turkey.
  • In November 2022, CNH Industrial N.V. is a global leader in the manufacturing and distribution of agricultural and construction equipment, trucks, commercial vehicles, and powertrains. partnered with Monarch Tractor, an AgTech company, to develop fully electric autonomous tractors. This collaboration will expand CNH Industrial's is a leading global manufacturer of agricultural and construction equipment product lineup.
  • In August 2022, AGCO Corporation is a prominent global leader in the design, manufacture, and distribution of agricultural equipment and solutions. introduced the latest New 700 Vario Series tractors in North America. These tractors feature an improved powertrain with FendtiD low engine speed, increased hydraulic capacity, VarioDrive transmission, and a larger frame, enhancing AGCO's presence in the North American market.

*Definition: The agricultural tractor market consists of companies that manufacture and sell tractors for use in agricultural activities like farming, plowing, harvesting, etc. Tractors help farmers prepare fields, plant crops, apply fertilizers and pesticides, and transport harvests. Leading players in this market produce a range of tractors that vary in horsepower, attachments, and technologies to suit different farm sizes and soil conditions. They market their tractors globally to boost farm productivity and support commercial agriculture worldwide.

Market Segmentation

  • Operation Insights (Revenue, US$ BN, 2019 - 2031)
    • Manual
    • Autonomous
  •  Engine Power Insights (Revenue, US$ BN, 2019 - 2031)
    • Below 40 HP
    • 40 HP–120 HP
    • 121 HP–180 HP
    • 181 HP–250 HP
    • More than 250 HP
  •  Type Insights (Revenue, US$ BN, 2019 - 2031)
    • ICE
    • Electric/Hybrid
  •  Drive Type Insights (Revenue, US$ BN, 2019 - 2031)
    • 2-Wheel Drive
    • 4-Wheel Drive
  • Regional Insights (Revenue, US$ BN, 2019 - 2031)
    • North America
      • U.S.
      • Canada
      • Latin America
    • Brazil
      • Argentina
      • Mexico
      • Rest of Latin America
    • Europe
      • Germany
      • U.K.
      • France
      • Italy
      • Russia
      • Rest of Europe
    • Asia Pacific
      • China
      • India
      • Japan
      • Australia
      • South Korea
      • ASEAN
      • Rest of Asia Pacific
    • Middle East & Africa
      • GCC Countries
      • South Africa
      • Rest of Middle East & Africa
  • Key Players
    • Agco Tractors (Fendt)
    • Captain Tractors
    • Eicher Tractors
    • Escorts Tractors
    • Force Tractors
    • Gromax Agri Equipment Limited
    • John Deere Tractors
    • JCB
    • Kubota Tractor
    • Mahindra Tractors
    • Monarch Tractor Electric Tractor
    • New Holland Tractors
    • SDF
    • Sonalika Tractors
    • SOLECTRAC
    • Standard Tractors
    • Swaraj Tractors

Frequently Asked Questions

The CAGR of the agricultural tractor market is projected to be 5.6% from 2024 to 2031.

Mechanization of agriculture and precision farming and technology advancements are the major factors driving the growth of the agricultural tractor market.

Rising material costs and meteorological uncertainties affecting crops are the major factors hampering the growth of the agricultural tractor market.

In terms of operation, mannual is estimated to dominate the market revenue share in 2024.

Agco Tractors (Fendt), Captain Tractors, Eicher Tractors, Escorts Tractors, Force Tractors, Gromax Agri Equipment Limited, John Deere Tractors, JCB, Kubota Tractor, Mahindra Tractors, Monarch Tractor Electric Tractor, New Holland Tractors, SDF, Sonalika Tractors, SOLECTRAC, Standard Tractors, and Swaraj Tractors are the major players.

North America is expected to lead the agricultural tractor market in 2024.

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