Agricultural Tractors Market Share, Size, Trends, Industry Analysis Report, By Engine Power (Less Than 40 HP, 41 To 100 HP, and More than 100 HP); By Driveline Type; By Region; Segment Forecast, 2023 - 2032
- Published Date:May-2023
- Pages: 119
- Format: PDF
- Report ID: PM3288
- Base Year: 2022
- Historical Data: 2019-2021
Report Outlook
The global agricultural tractors market was valued at USD 87.05 billion in 2022 and is expected to grow at a CAGR of 6.7% during the forecast period. The market growth depends on several factors, those include, increasing population and urbanization, technological advancements, government support, increasing farm sizes, growing demand for food and biofuels, and the adoption of precision farming techniques. These drivers are expected to fuel the demand for more efficient and advanced tractors that can increase agricultural productivity and meet the growing demand for food.
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Favorable government policies are expected to drive growth in the agricultural tractor market. For instance, the implementation of the European Union's Common Agricultural Policy (CAP) and the United States Farm Bill is expected to increase demand over the forecast period. In addition, the government has implemented various initiatives to support the development of the agricultural sector in China, including subsidies and financial assistance to farmers. This has led to increased investment in agriculture and increased demand for tractors.
An agricultural tractor is a specialized vehicle designed for use in farming and agricultural operations. Tractors are typically used to pull or push agricultural machinery and equipment, such as ploughs, cultivators, seeders, and harvesters, in order to till and prepare the soil, plant, and harvest crops, and perform other farming tasks. Agricultural tractors come in various sizes and configurations, from small, compact models for use in orchards and vineyards, to large, powerful models for use on large farms and ranches. They are an essential tool in modern agriculture, helping farmers to increase productivity and efficiency.
To remain competitive in the market, many companies are investing in the adoption of sophisticated processes and technologies to improve the quality and efficiency of their products. For example, John Deere has developed a technology called "AutoTrac," which is an advanced guidance system that uses GPS to steer tractors and other farm machinery with a high degree of accuracy. Moreover, AGCO Corporation produces advanced tractors with technologies like the "FendtONE" system and precision farming solutions. The company has expanded its global presence through acquisitions, such as Kepler Weber in Brazil, to offer a more comprehensive range of products to its customers.
The COVID-19 pandemic has had a mixed impact on the market. While the initial outbreak led to disruptions in the supply chain and reduced demand for tractors due to lockdowns and restrictions on movement, the market has since rebounded in many regions. One of the main factors driving the recovery of the agricultural tractor market has been the shift toward mechanized farming practices. With labor shortages and social distancing measures in place, farmers are increasingly turning to mechanization to maintain productivity. This has led to increased demand for tractors and other agricultural machinery.
However, the pandemic has also led to disruptions in the supply chain, with manufacturers facing challenges in sourcing raw materials and components, and shipping finished products to customers. This has led to higher prices and longer delivery times, which have impacted the purchasing decisions of farmers and agribusinesses.
In addition, the pandemic has led to economic uncertainty, which has impacted the overall demand for tractors. In some regions, farmers are facing financial difficulties due to lower crop prices and reduced demand for their products, which has led to a reduction in tractor purchases. Overall, the impact of COVID-19 on the agricultural tractor market has been mixed, with some regions experiencing growth due to increased mechanization, while others have faced challenges due to disruptions in the supply chain and economic uncertainty.
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Industry Dynamics
Growth Drivers
The shift towards mechanization of agriculture has led to increased adoption of tractors as farmers seek to improve efficiency and reduce labor costs. In Australia, the mechanization of agriculture has led to an increase in demand for tractors, as farmers seek to improve their productivity and profitability. Moreover, Governments across the world are providing subsidies and financial incentives to farmers to encourage agricultural activities. This has increased the demand for tractors as farmers seek to improve their productivity and profitability. For example, the Indian government has launched various schemes and subsidies to promote agriculture mechanization, which has increased the demand for tractors.
Market expansion will be aided by technological advancements and the growing trend of precision agriculture. Technological advancements have led to the development of more efficient and high-performing tractors that offer greater productivity and reduced operating costs. For example, John Deere's "smart tractors" use GPS technology to provide precision guidance for planting and harvesting, which helps to reduce waste and improve crop yields. The adoption of precision agriculture techniques such as GPS-guided planting and precision spraying requires the use of advanced tractors, which has led to an increase in demand for such tractors. In Japan, the adoption of precision agriculture techniques has led to an increase in demand for tractors that are equipped with GPS technology and other advanced features.
Report Segmentation
The market is primarily segmented based on engine power, driveline type, and region.
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By Engine Power |
By Driveline Type |
By Region |
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Less than 40 HP engine power segment dominates the market share in 2022
As of 2022, the less than 40 HP segment holds the majority of the market share in terms of volume. This segment's growth can be attributed to its affordability, compact size, and convenience in performing basic farming operations. It is mainly adopted in the Asia Pacific region, where most farmlands are below 10 hectares, and it is the preferred choice of farmers in the region. Furthermore, the electrification of tractors in this segment is expected to gain momentum in the coming years. Another main advantage of tractors with less than 40 hp is their affordability and lower operating costs, making them accessible to small-scale farmers and hobbyists. In addition, they are versatile and can be used for a variety of tasks such as ploughing, tilling, mowing, and hauling.
40-100 HP segment is anticipated to register growth over the study period. This growth is attributed to the increasing income levels, tech-savvy farmers, and well-established after-sales services in these markets. However, rising diesel prices may be a major concern for the forecast period. Additionally, India currently outsources semiconductor devices and chips, which has led to a shortage of these components in the country. To address this issue, the government has announced a USD ten thousand package to encourage businesses to establish semiconductor chip manufacturing facilities in India, which is likely to boost local production in the coming years.
2WD segment accounted for the largest market share in 2022
The low upfront costs and better maneuverability are some of the factors that are expected to drive the demand for 2WD tractors, especially in the Asia Pacific market. In India, 2WD tractors are the most preferred choice among middle-income farmers. For instance, Mahindra Tractors offers a range of 2WD tractors in India, including the Mahindra Yuvraj 215 NXT, which is specifically designed for small farm operations.
The 4WD segment is expected to register a significant growth rate during the forecast period due to the growing demand for high-powered tractors for heavy-duty applications, such as ploughing and harvesting in rough terrain. These tractors provide better traction and stability, making them ideal for hilly and mountainous regions. For example, John Deere offers a range of 4WD tractors, including the John Deere 9R Series, which is specifically designed for heavy-duty applications and can be used in various farming operations.
The demand in Asia Pacific is expected to witness significant growth
The Asia Pacific region is expected to experience significant growth in the market due to the growing population and increasing demand for food in countries like India and China. In addition, many governments in the region are promoting agricultural mechanization and providing subsidies to farmers to purchase agricultural tractors. For instance, in 2020, the Indian government launched the Farm Mechanization Scheme to provide financial assistance to farmers for the purchase of agricultural machinery, including tractors.
Additionally, according to data from the National Bureau of Statistics, 60% of China's farming activities are mechanized. Large and medium-sized tractors are being increasingly replaced by smaller tractors. At the end of 2020, there were 4.4 million large- and medium-sized tractors in China. As part of the "Made in China 2025" campaign, the government has prioritized the domestic production of agricultural machinery, which is expected to drive tractor sales in the country.
In North America, the market is driven by the increasing demand for higher horsepower tractors to support large-scale farming operations. In addition, precision agriculture techniques, such as GPS guidance and telematics, are becoming increasingly popular in the region. For example, in 2021, John Deere launched the new 9RX Series Tractors, which feature advanced technologies like AutoTrac Vision & JD Link to improve productivity and efficiency.
Competitive Insight
Some of the major players operating in the global agricultural tractors market include AGCO Corporation, CNH Industrial, Deere & Company, Escorts Limited, Kubota Corporation, Mahindra & Mahindra, Yanmar, JCB Limited, Tractors and Farm Equipment, SDF Group, Argo Tractors., Kioti Tractor Division, Daedong, Lovol Heavy Industry, and Landini.
Recent Developments
- In July 2021, New Holland introduced the “T7 Heavy-duty Tractor” with the PLM Intelligence, a new addition to its range of agricultural tractors. It is designed to enhance farmers' productivity by enabling multi-tasking across various fields and transport applications.
Agricultural Tractors Market Report Scope
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Report Attributes |
Details |
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Market size value in 2023 |
USD 92.56 billion |
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Revenue Forecast in 2032 |
USD 165.79 billion |
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CAGR |
6.7% from 2023- 2032 |
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Base year |
2021 |
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Historical data |
2019- 2021 |
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Forecast period |
2023- 2032 |
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Quantitative units |
Revenue in USD billion and CAGR from 2023 to 2032 |
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Segments Covered |
By Engine Power, By Driveline Type, By Region |
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Regional scope |
North America, Europe, Asia Pacific, Latin America; Middle East & Africa |
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Key Companies |
AGCO Corporation, CNH Industrial N.V., Deere & Company, Escorts Limited, Kubota Corporation, Mahindra & Mahindra Limited, Yanmar Co., Ltd., Claas KGaA mbH, JCB Limited, Tractors and Farm Equipment Limited, SDF Group, Argo Tractors S.p.A., Kioti Tractor Division, Daedong-USA, Inc., Lovol Heavy Industry Co., Ltd., Landini S.p.A. |
FAQ's
The agricultural tractors market report covering key segments are engine power, driveline type, and region.
Agricultural Tractors Market Size Worth $165.79 Billion By 2032.
The global agricultural tractors market expected to grow at a CAGR of 6.7% during the forecast period.
Asia Pacific is leading the global market.
key driving factors in agricultural tractors market are rising number of farm training programs promoting the use of agricultural machinery.
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