Agricultural Tractors Market Expected to Expand at a 6.05% of CAGR upto 2032

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04 Oct 2024

Table of Content

The global agricultural tractors market growth is driven by the increasing use of self-driving agricultural tractors, rising demand for compact tractors on small farms, rapid adoption of mechanization, and increasing demand from developing countries.

The agricultural tractors market was USD 3,014 thousand units in 2022, and it will hit USD 5,422.91 thousand by 2030, advancing at a rate of 6.05% by the end of this decade.

Market Overview:

A motor vehicle that's exclusively or mainly used for agricultural purposes is known as a tractor. An agricultural tractor is a four-wheeled or track-laying vehicle used to pull farm machines. It makes farming activities easier and saves time. The agricultural tractor is used for plowing, transporting, hauling, cultivating, planting, reaping, harvesting, or any other agricultural purposes on any farm or private property. It is also used for transporting from one farm to another. Tractors play a crucial role in farmers’ life, as the entire farming process is dependent on the tractor. Tractors make farming operations more efficient and convenient.

A tractor is a type of farm machine that can use as a scraper, digger, or bulldozer. The farm tractor is not operated on any highway to transport a payload or for any other commercial function. The cost of labor is significantly increasing owing to rapid urbanization as well as the migration of people to cities. Farm labor costs are directly linked to production costs. Mechanization has the potential to lower labor wages. Due to the rising labor wages as well as the scarcity of farm labor resulting in rising rates of mechanization. Moreover, it is projected to accelerate the market growth during the forecast period. To assist farmers, the government has undertaken several favorable initiatives and programs.

The most common types of tractors used in the agriculture sector such as utility tractors, compact tractors, row crop tractors, implement carrier tractors, two-wheel tractors, and garden tractors. Compact or mini tractors are suited for agricultural operations including plowing vast gardens, fields, and pastures. These tractors can be used to collect low-hanging fruits, prune trees, and do a variety of other tasks. Additionally, the market has grown as a result of the increasing government initiatives of offering subsidies to farmers and lower interest rates on loans. Furthermore, technological developments have transformed farming and agricultural processes are projected to boost agricultural tractors market expansion in the coming years. 

Track and Trace Solutions Market Report Scope:

 

Report Highlights

• By Engine Power, the segment with less than 40 HP accounted for the larger revenue share. The low cost, compact size, and better convenience provided by less than 40HP tractors to do all fundamental farming activities can be attributed to the rapid expansion. Compact or mini-size tractors are tractors ideal for small farms. Compact tractors are designed with a small wheelbase to allow for tight turns and easy movement in compact spaces.
• By Driveline Type, the 2-Wheel drive segment is projected to register a considerable CAGR during the forecast period. The segment is growing at a 6.1% annual growth rate between 2023 and 2032. Increasing demand for 2-Wheel drive in developed and developing countries is projected to boost the expansion of the segment. In India, 2-Wheel drive tractors are the most popular among middle-income farmers. Such tractors are useful in dry farming conditions. These tractors depend primarily on the rear axle to enhance traction. 2WD tractors are often used for farm activities such as topping, fertilizer spraying, seeding, and others.
• By Application, the Irrigation segment is expected to expand at a robust growth rate during the forecast period owing to making the process much easier and contributing to water conservation.
• By Operations, the automatic tractor-vehicle segment is expected to hold the key market share during the forecast period owing to technological advancement, rising investment by the prominent market players, and increasing government initiatives to reduce automobile carbon emissions. These tractors farm land without the assistance of a driver by using GPS and other wireless technology. They function easily with the guidance of a supervisor at a control station or with a manned tractor in the lead.

Regional Insights:

The Asia Pacific region had a dominant share of over 67% in terms of volume. The growth of the region is attributed to favorable government initiatives and increasing tractor demand in countries such as India, and China. China and India are the largest producers of wheat and rice. Owing to the increasing agricultural activities, the sales of agricultural tractors rise. Every year, between 600,000 and 700,000 agricultural tractors are sold.

On the other hand, the Europe market is expected to register a rapid CAGR during the forecast period. Huge farms in various European countries, notably the United Kingdom, the Netherlands, Hungary, Denmark, and Spain, are primarily accountable for this growth. Europe is responsible for 38% of all farms globally. With the availability of advanced modern technology and the lack of availability of farm labor in the region. Farmers are increasingly adopting tractors in agriculture to save time and resources, save expenses, and boost productivity. France, along with other European countries, has been a pioneer in mechanizing agriculture.

Market Dynamics:

Drivers

Increasing farm mechanization in emerging economies

The growing use of farm technologies to increase output is driving the rising demand for tractors. To create superior outcomes from machine operations, agricultural equipment can use technology such as high-precision positioning systems. Farm mechanization is the development and use of advanced machines that can replace human and animal labor in agricultural activities. Mechanization has a considerable favorable influence on crop costs, production value, revenue, and return rate. Some of the important benefits of farm mechanization such as save time, promoting large-scale farming, increasing output, improvement in the quality of products, use of less human labor, and reduction in the cost of production.

Restraint

Lack of skilled labor

The lack of skilled labor to operate advanced and modernized tractors is projected to hamper the growth of the global agricultural tractors market and is likely to limit the expansion of the global agricultural tractors market during the forecast period. In addition, robots, drones, and precision agriculture are some of the other agricultural technologies that are rapidly being deployed, which may reduce the need for tractors.

Opportunities

Government initiatives for the rapid development of agricultural activities

Several governments such as India, the United States, China, and others support the rapid development of agricultural activities. The various types of subsidies offered by the government to support farmers in agricultural activities. For instance, The Indian government has numerous programs concerning agricultural equipment, such as loan-cum-subsidy for tractor purchases. Furthermore, under NABARD guidelines, any farmer with eight acres of land can obtain a nine-year tractor loan at a 12.5% interest rate.

Recent Developments: 

• In June 2022, Solis Yanmar introduced three new compact tractor ranges in the below 30 HP range for Turkish farms that would be exported from India.
• In November 2022, VST Tillers Tractors Ltd and ZETOR TRACTORS launched two best-in-class tractors at the CII Agro Tech India 2022 show. VST and ZETOR collaborated on the development of these 45 HP and 50 HP category tractors at their India and Czech Republic plants, respectively.
• In November 2021, CNH Industrial N.V. formed a long-term deal with AgTech business Monarch Tractor to produce fully electric autonomous tractors. The project would allow the former company to broaden its product offering.

Major Key Players:

• Deere & Company
• SAME DEUTZ-FAHR Group etc.
• Kutoba Corporation
• McCormick International
• Mahindra Group
• Yanmar
• Farmtac
• Massey Ferguson
• Escorts Group
• Kubota
• Dongfeng
• Jordan Tractor and Equipment Co.
• New Holland
• AGCO Corp.
• Kioti Tractor
• SDF Group
• Daedong Industrial
• CNH Industrial N.V.
• Argo Tractors S.p.A.
• Valtra Tractor

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