Tractor Market to be Valued USD 79 Billion by 2026
Increasing
mechanization in agriculture and growing popularity of bank financing
facilities are expected to lead to the growth of tractors all over the globe in
the forecast period.
According
to TechSci Research report, “Global
Tractor Market By Power Output (Under 40 HP, 40 HP - Under 100 HP and 100
HP & Above), By Drive Type (Two-Wheel Drive & Four-Wheel Drive), By
Application (Agriculture & Non-Agriculture), By Region, Competition
Forecast & Opportunities, 2016-2026F”, the global tractor market is anticipated to grow at a robust
growth rate of 4.96% during the forecast period, owing to the booming demand of
agriculture products and increasing mechanization in agricultural industry. The
global tractor market is expected to reach 2.80 million units till 2026. India,
being the largest tractor producer and market in the world, is expected to reach
1.27 million units till 2026. According to the laid-out Union Budget, the Government
of India is planning to improve farm productivity and mechanization of
agricultural practices, strengthen farmers’ income to ease the purchasing of
tractors to sustain the growth in the country. China is the second largest
tractor market in the world. According to the National Bureau of Statistics, in
2020, China produced 669.49 million tons of grain which was an increase of 5.65
million as compared to 2019 statistics. In the country, the wheat output also
increased by 0.5%, soybean production edged up 8.3%, and rice output grew by
1.1%. All these hiked agricultural domestic as well as export demands have
increased the mechanization and utilization of tractors in the field, as a
result an increase in tractor demand has been observed. To cope with such
increasing agricultural demand of rising population, tractor market is
susceptible to withstand a robust growth in the forecast period.
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The
global tractor market is classified on the basis of application type, by power
output, by drive type, and by region. Based on application type, the market is
segmented into agriculture and non-agricultural purposes. Tractors are designed
to perform as all-purpose farming equipment for plowing, tilling, planting,
etc. and hence is majorly used for such purposes. On the other hand, due to
limited application of tractors in heavy construction, mining, and logistics
industries, they hold a small share in non-agricultural purposes but increased
usage of tractors in domains such as haulage in light construction and
infrastructure projects, will further increase demand of tractors in the
forecast period. In terms of engine power output, the tractor market is
segmented in three categories. First, rated engines under 40HP, secondly the
tractors with rated engines of 40HP but below 100HP and lastly, tractors with
rated engine of 100HP & above. On the basis of drive type, the market is
segmented among two-wheel drive and four-wheel drive. Tractors are
significantly used or purchased by rural authorities/associations or farmers.
For such communities, price of a tractor is a very significant factor of making
a purchase decision, and on the other hand, utilization & performance of
machine for their all-round purposes are considered by them while making a
purchase. Tractors of engines with rated power output of 40HP to below 100HP
and of two-wheel drive are most suitable to the consumers due to being
relatively inexpensive as well as heavy enough to perform mentioned farming
activities and hence are in most demand all over the globe. However, with
increasing utilization of tractor in heavy construction as well as large scale
farming activities are aiding the sales of heavy tractors with four-wheel drive
and rated engine output of above 100HP.
In addition to that, by region, the market is distributed into Asia-Pacific,
North America, Europe, South America, and Middle East & Africa. India and
China are one of the largest exporters of Rice. China has 7% of the arable land
and with that, they feed 22% of the world’s population. Around 58% of Indian
population is indulged in agricultural activities, the country has a total 96-million-hectare
irrigated area. Both the countries are the largest wheat producers in the
world. Hence, to withstand such enormous agricultural needs, tractor demand in
these countries is the most. Tractor market in these two countries is expected
to grow at a robust rate to reach around 1.30 million units cumulatively till
2026.
Due to the implementation of lockdown to prevent the spread of the COVID-19
pandemic, sales of tractors in the end of first quarter and in the starting
month of second quarter slightly declined in most of the countries. However, a
very strong agricultural & food demand was followed afterwards in the
remaining year of 2020, driving the year’s performance to a positive trend.
India and China witnessed a massive increase of 10.94% and 53.12% in 2020 as
compared to 2019 sales. Nevertheless, some of the countries including Japan,
France, Italy, United Kingdom, Spain, Belgium, etc. witnessed a degrowth in the
year 2020, mainly due to contraction of production units and halt on
international trade. However, the market is seen to be recovering at a good
pace and is expected to overcome in the 2021-2022 period. Hence, giving
positive outlook to the market eventually.
Mahindra & Mahindra Ltd. holds the largest share in global tractor
market, followed by Deere & Co. (John Deere) and Tractor & Farm
Equipments Ltd., which holds double-digit shares individually. Other
international leaders of the market are Sonalika International Tractors Ltd.,
Escorts Ltd., Kubota Corporation, CNH Industrial N.V, AGCO Corporation (with
subsidiary brands: Massey Fergusson, Valtra & Fendt), Case IH, CLAAS KGaA
mbH, YTO Group (Dongfanhong), Deutz-Fahr GmbH, Dongfeng Agricultural Machinery
Group Co., Ltd., etc. which holds single-digit shares.
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“Mahindra & Mahindra Ltd. dominated the market in the year 2020, due
to its remarkable dealership network, which offers a wide range of economical
yet qualitative products with adaptive technological demands of their customers
as well as withstanding government’s safety and emission norms. The demand for tractors
is anticipated to increase globally in the coming years, on account of increased
needs of mechanized farming and growing government’s focus on strengthening
agriculture industry and improving productivity.”, said Mr. Karan Chechi,
Research Director with TechSci Research, a research based global management
consulting firm.
“Global Tractor Market By Power Output (Under 40 HP,
40 HP - Under 100 HP and 100 HP & Above), By Drive Type (Two-Wheel Drive
& Four-Wheel Drive), By Application (Agriculture & Non-Agriculture), By
Region, Competition Forecast & Opportunities, 2016-2026F”, has
evaluated the future growth potential of the global tractor market and provides
statistics & information on market size, structure and future market
growth. The report intends to provide cutting-edge market intelligence and help
decision makers take sound investment decisions. Besides, the report also
identifies and analyzes the emerging trends along with essential drivers, challenges,
and opportunities in the global tractor market.
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