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The agricultural tractor market size is forecast to increase by 311.23 thousand units at a CAGR of 3.73% between 2022 and 2027. Market expansion hinges on a multitude of pivotal factors, foremost among them being robust government support aimed at fostering growth within the agriculture sector. This backing is crucial in driving innovation and facilitating advancements through investments in research and development activities. Another significant contributor to market growth is the advent of driverless agricultural tractors, revolutionizing farming practices with automation and efficiency. These technological advancements not only enhance productivity but also pave the way for sustainable agricultural practices. Furthermore, collaborations between public and private sectors further catalyze market growth, ensuring a conducive environment for continuous innovation and modernization within the agricultural landscape.
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This report extensively covers market segmentation by product (two-wheel drive and all-wheel drive), engine capacity (low power, mid power, and high power), and geography (APAC, Europe, North America, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
The market is propelled by advancing Technological Advancements like telematics and semiconductors, leading to innovations such as electric tractors and driverless tractors. A trend towards Precision Farming and Farm Technology integration improves Farming Operations and boosts efficiency. Challenges include Supply chain disruptions impacting Agricultural Equipment availability, alongside fluctuating Steel and Aluminum prices affecting manufacturing costs. Balancing Engine Power and Engine Volume to meet the diverse needs of HP Tractors, Compact tractors, and High-Performance Tractors remains essential for ensuring Reliability and optimizing Power Output in various Agricultural Activities. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The investments in research and development activities are notably driving the market growth. Companies constantly invest in various R&D activities to create new technologies that can benefit consumers and help them differentiate themselves. These new technological innovations include drones, robots, self-driving tractors, and others. Other technological advances in the agricultural tractor sector include the high-performance tractor, the adoption of Internet of Things (IoT) sensors, wireless communication, cloud apps, and steering wheel replacements. Furthermore, some technologies can also measure the amount of pressure being exerted on each seed while sowing.
For instance, in May 2018, Sonalika Group announced plans to invest USD1.32 billion in setting up a new R&D center in New Delhi. This new center will help increase efficiency by reducing the product development lifecycle and help achieve sales of more than 2 lakh units. Another example is the launch of the e100 Vario battery-electric compact tractor by Fendt. The product comes with an output of 68 hp (50 kW) and provides five hours of operation per charge. The battery can be charged up to 80% in 40 minutes using an IEC 62196 Type 2 connector. The company claims that the product reduces both running and maintenance costs significantly when compared with other existing variants. Therefore, such initiatives will boost the global market growth during the forecast period.
The increasing availability of agricultural tractors with improved features is an emerging trend in the market. The threat of rivalry in the market is intense, thereby leading companies to indulge in constant R&D and development of new product designs. This creates products that address the problems of the farmers and support them by increasing productivity with minimum inputs and cost-efficiency. For instance, the 9RX Series Tractor by Deere and Company, which ranges from 470 to 620 engine hp, has improved features such as parallel plane four-bar-linkage cab suspension. This feature allows a smooth ride and eliminates unwanted bumps and vibrations.
Furthermore, there has been an increasing trend of tractors deployed with telematics as well as autonomous and electric features. The possibility of obtaining torque from an electric powertrain, which means more power at low speeds, is more compared to conventional engine-based tractors. Even traditional OEMs like Mahindra and Mahindra have started investing in R&D to make Electric tractors. Hence, such factors will fuel the global market growth during the forecast period.
The cyclical pattern of the agricultural industry is a major challenge impeding market growth. The natural phenomenon of seasonal agricultural cycles leads to the seasonal availability of disposable income for farmers. This impacts their purchasing power, thus leading to seasonal purchases of agricultural equipment like tractors. This pattern is affected by various factors, including environmental conditions like rain forecasts and financial resources available for farmers, including the availability of credit facilities, government support in the form of subsidies, and the availability of automatized farming equipment at the disposal of farmers.
Moreover, this instability in agricultural patterns directly affects the sales of automatic farming equipment. For instance, the sales of traction engine in the UK have been seasonal in nature. In 2017, agricultural tractors sold in the region witnessed irregular cycles, where between March and July, the sales made were the highest than the other months. Similar patterns can be observed in various other agriculture-based regions. Therefore, such factors will hinder the global market growth during the forecast period.
The market growth analysis report includes the market's adoption lifecycle, covering the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Argo Tractors Spa - The company offers services like public infrastructure mapping, transportation trip urban planning, natural resource management, and many more. The key offerings of the company include GIS services.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market segmentation reflects a dynamic landscape driven by various key components. Engine Power and Engine Volume are pivotal factors influencing the selection of tractors for different farming operations. Technological advancements such as telematics and semiconductors are shaping the emergence of electric tractors and driverless tractors, enhancing farm mechanization and precision farming capabilities. Compact tractors cater to the needs of small farms and agricultural activities requiring agility and maneuverability. On the other hand, HP Tractors and High-Performance Tractors deliver robust power output and reliability for larger-scale agricultural operations. Farm Technology integration and participation in Farm Training Programs are empowering farmers with the necessary skills and knowledge for efficient tractor utilization. The supply chain disruptions and fluctuations in steel and aluminum prices impact the availability and affordability of agricultural equipment, highlighting challenges in the industry.
The market share growth by the two-wheel drive segment will be significant during the forecast period. Two-wheel drive agricultural traction engines are also known as walking traction engines, iron buffalo, steel buffalo, and hand tractors. These tractors have engine capacities ranging between 5 hp and 200 hp. They also include self-powered axles that can pull trailers, plowing equipment, cultivation equipment, seeding equipment, and others. They work best in fields between three to five acres of land.
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The two-wheel drive segment was valued at 1,144.58 thousand units in 2017 and continued to grow until 2021. Some advantages of a two-wheel drive agricultural traction engine include turning big circles, steering brakes, gas or diesel capability, electric start function, completely gear driven, low-running cost, and minimum maintenance costs. These variants can be used in both wet and dry conditions, thus making them convenient to use in varied climatic conditions. Furthermore, one of the other most common uses of two-wheel drive traction engines is domestic use. These traction engine can operate in the attached backyards or small spaces of houses, where hobby farmers or home gardeners practice agricultural activities on a small scale. Moreover, they are designed to attach many different implements to perform a variety of tasks, in contrast to the more traditional method of using multiple dedicated tractors/machines for each task. Therefore, the abovementioned factors will boost segment growth during the forecast period.
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APAC is estimated to contribute 71% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
Globally, APAC dominates the market, with its major share coming from the sales of low-power agricultural traction engines. This is due to the high focus on increasing farm yields and productivity. India is the largest contributor to the global market despite low farm mechanization. This is because of the fragmented agricultural lands in the country. In addition, the popularity of low-priced agricultural traction engines in India is higher than high-priced tractors due to the financial instability among small- and mid-sized farmers. Such factors will boost the regional market growth.
Additionally, the growing foreign direct investment (FDI) in various countries is expected to influence agricultural growth in the region during the forecast period. For instance, in the fiscal year 2020, the FDI inflow in India increased by 13% compared with 2019. In August 2020, the Agriculture Ministry supported agri-entrepreneurship to promote agricultural innovation. The Government of India announced that it would fund 234 startups, which are involved in the agriculture sector. Thus, the rise in funding in the agriculture industry in India will increase the production of traction engines, which will result in simultaneous regional market growth during the forecast period.
The report forecasts market growth by revenue at global, regional & country levels and provides a market research and growth analysis of the latest market trends and growth opportunities from 2017 to 2027.
The market is witnessing significant advancements and transformations driven by various key factors. With a diverse 8 Family Tractor Line-Up including 8R Wheel Tractors and 8RT Two-Track Tractors, manufacturers are offering cutting-edge equipment to meet the evolving needs of farmers. The market is undergoing notable shifts and advancements driven by a multitude of factors. Manufacturers are increasingly focusing on after-sales services to enhance customer satisfaction and loyalty. There's also a growing awareness among farmers regarding the benefits of modern agricultural machinery.
Moreover, the introduction of driverless tractors and autonomous tractors is revolutionizing farming operations, enhancing efficiency, and reducing labor costs. Additionally, the market is experiencing a shift towards electric-powered tractors and greener technologies to address concerns regarding carbon emissions and comply with environmental regulations. Technological innovations such as machine learning algorithms and precision agriculture technology are enabling precision farming and optimizing crop yields and resource utilization. Big data analytics are also playing a crucial role in decision-making processes, providing valuable insights for farm management.
However, the market faces challenges such as supply chain disruptions and regulatory scrutiny, impacting service costs and reliability. Sustainability concerns are driving demand for greener and more efficient tractor solutions, while marginal farmers and small farms seek compact tractors for their farming operations. Overall, the Market is evolving rapidly, driven by technological advancements, environmental considerations, and the changing needs of tech-savvy farmers in major economies. Collaboration, innovation, and reliability remain pivotal in shaping the future of the tractor industry. Tractors equipped with various cylinders offer enhanced power and efficiency, while advancements in electric infrastructure are paving the way for electric-powered tractors. Engine specifications like Engine Power and Engine Volume are crucial considerations for farmers when selecting tractors for their operations.
Market Scope |
|
Report Coverage |
Details |
Page number |
172 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 3.73% |
Market growth 2023-2027 |
311.23 th units |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
2.37 |
Regional analysis |
APAC, Europe, North America, Middle East and Africa, and South America |
Performing market contribution |
APAC at 71% |
Key countries |
US, Turkey, India, China, and Brazil |
Competitive landscape |
Leading companies, Market Positioning of companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
AGCO Corp., Argo Tractors Spa, Caterpillar Inc., CLAAS KGaA mBH, CNH Industrial NV, Daedong Corp., Deere and Co., Escorts Ltd., ISEKI and Co. Ltd., J C Bamford Excavators Ltd., Jiangsu Yueda Intelligent Agricultural Equipment Co. Ltd., Kubota Corp., Mahindra and Mahindra Ltd., Mitsubishi Heavy Industries Ltd., Pronar Ltd., SDF SpA, Tractors and Farm Equipment Ltd., Yanmar Holdings Co. Ltd., and Zetor Tractors AS |
Market dynamics |
Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Product
7 Market Segmentation by Engine Capacity
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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