AGRICULTURAL TRACTOR MARKET ANALYSIS

The global agricultural tractor market size was valued at USD 67020 million in 2021 and is anticipated to witness a compound annual growth rate (CAGR) of 6.5% from 2022 to 2030. The global agricultural tractor market is driven by various factors, including the rising adoption of precision farming, the rise in number of medium-scale farmers, and advancements in tractor technology. The agricultural tractor market has a strong potential to grow with the rising demand for better quality crops. The demand for tractors is likely to be boosted by government initiatives to promote mechanized farming. Moreover, the increasing number of consumers worldwide is expected to increase the market size.

Global Agricultural Tractor Market: Regional Insights

The global agricultural tractor market is regionally divided into North America, Europe, Latin America, Asia Pacific, Middle East and Africa.

Among region, North America is expected to hold a large share in the global agricultural tractor market over the forecast period. This is due to presence of biggest agricultural-based economies such as the Canada and the U.S. in the region. Due to technological development as well as higher replacements of old tractors, the demand for agricultural tractor is high in the region. Moreover, these countries have high economic feasibility of machinery, which further supports the market growth across the region. For instance, as per the data of Statista, <40 HP 2WD tractors accounted for highest share 65.3% in 2017 in the U.S. It was followed by 40-100 HP 2WD tractors (25.9%), >100 HP 2WD tractors (7.7%), and >100 HP 4WD tractors (1.1%).

Moreover, Asia Pacific is also anticipated to witness substantial growth in the global agricultural tractor market over the forecast period. This growth can be attributed to growing initiatives and incentives from governments for farm mechanization in the region. Moreover, growing product sales, easy availability of loan, better monsoon conditions, and favorable Minimum Support Price (MSP) in the region are supporting the market growth. For instance, according to the Coherent Market Insights, product sales in India are anticipated to reach nearly 900 thousand units by 2022.

Figure 1: Global Agricultural Tractor Market Share (%), By Region, 2021

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Global Agricultural Tractor Market Drivers:

Growing rate of farm mechanization in emerging nations is expected to augment growth of the global agricultural tractor market over the forecast period. Due to growing investments in agriculture, and push from government towards mechanization of farms is leading to rising rate of farm mechanization in China. The number of large agricultural producers continue to grow along with the number of rural companies involved in farming, and due to this the investment in farm mechanization is increasing in these countries. For instance, as per the Coherent Market Insight data, the number of sold tractors in India and China is high with nearly 1.3 million tractors sold in China and nearly 600,000 tractors sold in India in 2016.

Furthermore, the replacement cycles of tractors are shorter, which is also expected to propel growth of the global agricultural tractor market over the forecast period. The cost required for switching the tractor ownerships is relatively high for farmers, considering the yearly operational cost and initial investment. Despite that, farmers are replacing tractors in shorter cycles. And this further is expected to drive the market growth.

Global Agricultural Tractor Market Opportunities:

Growing levels of income, adoption of advance technology among farmers and present of well-established after sales services are expected to offer growth opportunities in the global agricultural tractor market over the forecast period. The demand for technologically advanced tractors is increasing in high-income economies such as Japan, Germany and the U.S. For instance, in February 2022, New Holland Agriculture North America announced the launch of first ever production T6 Methane Power tractor in the U.S. market. Thus, such factors are likely to support the market growth in the near future.

Furthermore, increasing demand for high-power tractors is also expected to provide market players with growth opportunities in the global agricultural tractor market during the forecast period. The demand for tractors with high power is increasing for more than 10-hectare farm sizes. The developing countries such as Brazil, China and India having strong government support for development in agriculture are likely to be the strongest markets for farm tractors. For instance, as per the China Agricultural Machinery Distribution Association, the overall number of tractors with 100 horsepower and above sold in China was 73,400 units in 2017.

Global Agricultural Tractor Market Trends:

Emergence of autonomous tractors is a growing trend in the global agricultural tractor market. Driverless or autonomous tractors operate without any supervision from humans and are utilized in plowing, tillage and other farming activities. These tractors are considered as a revolutionary product in agricultural industry around the globe.  The size of these tractors is half of the normal machine, and they do not consist a seat or steering. Thus, with several advantages offered by autonomous tractors, the demand for these machines is increasing around the globe, which is expected to fuel the market growth in the coming future.

Key players in the market are increasingly focusing on launch of novel products, which is expected to fuel growth of the global agricultural tractor market over the forecast period. For instance, in February 2021, Tractors and Farm Equipment or TAFE, who manufacture Massey Ferguson tractors announced the launch of its novel DYNATRACK Series of advanced tractor range offering dynamic performance, unmatched utility, sophisticated technology and versatility in a one single powerful tractor.

Global Agricultural Tractor Market Restraints:

The global agricultural tractor market is faced with various challenges, one of them is fragmentation of land holdings. The increasing fragmentation of lands and declined productivity around the world is creating operational problems with respect to various farming machineries. Due to practice of equal inheritance in siblings of a farm in countries such as China, India and other countries in Southeast Asia is leading to significant fragmentation in farmlands, which reduces the size of farms. Thus, this factor is expected to hinder growth of the market during the forecast period.

High dependence on commodity costs in the market is another factor expected to obstruct growth of the global agricultural tractor market over the forecast period. Higher cost of commodities, tractor’s replacement cycles are affected and during bearish commodity costs period, the price of tractors become higher. To prevent the commodity cost clutches in the market and for future-proof sales market players depend on new financing schemes for farmers for purchase of tractors.

Figure 2: Global Agricultural Tractor Market Share (%), By Horsepower, 2021

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Global Agricultural Tractor Market Segmentation:

The global agricultural tractor market report is segmented into Horsepower, Type, and Region.

Based on Horsepower, the market is segmented into Less than 40 HP, 40 HP to 99 HP, and Greater than 100 HP. Out of which, Greater than 100 HP segment is expected to dominate the global market over the forecast period and this is attributed to the availability of several options and alternatives. These tractor are known to occupy lesser space and can be utilized with higher flexibility. Due to ease of customization, these tractors are more amenable for experimenting. Thus, demand for tractors with less than 40HP is constant among farmers, which drives the segment’s growth.

40 HP to 99 HP segment is also expected to witness significant growth in the near future and this is owing to the high demand for tractors with 40 HP to 99 HP. These tractors are also called as utility tractors. The low-end versions of these tractors at times are in competition with compact tractors, which makes them promising substitutes for compact tractors.

Based on Type, the market is segmented into Pedestrian Tractors, and Wheeled Tractors. Out of which, Pedestrian Tractors is expected to dominate the global market over the forecast period and this is attributed to the growing rate of mechanization, growing cost of farm labor, and high versatility of pedestrian tractors leading to growing adoption go pedestrian tractors in countries such as China and India.

Wheeled Tractors segment is also expected to witness significant growth in the near future and this is owing to the high demand for wheeled tractors specifically in diversified terrain and climatic conditions. These tractors offer additional performance and traction due to which they are high in demand.

Global Agricultural Tractor Market: Key Companies Insights

The global agricultural tractor market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis.

Some of the key players in the global agricultural tractor market are CLAAS Group, Deere & Company, Mahindra & Mahindra Limited, CNH Industrial, Kubota Corporation, Massey Ferguson Limited, TAFE, Iseki & Co. Ltd., JCB, and Yanmar Co.

*Definition:

The agricultural tractor is one of the most important modern agricultural technologies. Its development revolutionized agricultural work and rural America, freeing millions of people to work in other industries. It also represents one of the most important applications of the internal combustion engine, rivaling automobiles and trucks in economic impact.