Tractors - Market Share Analysis, Industry Trends and Statistics, Growth Forecast (2024-2029)

The tractor market is projected to reach US$ 84.8 billion by 2024 and reach US$ 114.5 billion by 2029 at a growth rate of 5.90% during the forecast period (2024-2029).

The tractor market has been growing steadily in recent years, driven by factors such as increasing agricultural mechanization, increasing demand for powerful tractors and government support for agricultural mechanization. The large market size reflects the important role of tractors in improving agricultural efficiency. Adoption of precision farming techniques and demand for sustainable farming practices are also driving the growth of the tractor market.

The market is characterized by the presence of leading global companies such as John Deere, CNH Industrial (Case IH and New Holland), AGCO Corporation (Massey Ferguson and Fendt) and Kubota. These companies compete fiercely to provide tractors with a wide range of power and features to meet the varied needs of European farmers. Competition is not only on products, but also on service and support networks, with after-sales service playing an important role in the agricultural machinery sector.

In the long term, the main factor driving global tractor sales growth is the increasing rate of agricultural mechanization, especially in developing countries, rising farm labor costs, seasonal labor shortages and shorter tractor replacement cycles. However, some key industry players are focusing on mergers and acquisitions in the market and new product development. For example:

Highlights

1. The French company Seederal announced that it will begin developing electric tractors in 2023. The company is currently building a prototype electric tractor that is expected to produce 160 horsepower. This initiative is in line with the global trend of sustainable agriculture and the adoption of electric agricultural machinery.

2. At Kubota Connect in October 2022, Kubota introduced new products to dealers. M7 Series Generation 4 Kubota M7 is the company's largest livestock and feed tractor.

Advances in tractor technology are having a significant impact on the European market. Precision agriculture technologies, such as GPS guidance systems, remote information processing and autopilots, are increasingly being introduced into modern tractors. These technologies contribute to sustainable agricultural development by increasing operational efficiency, optimizing resource use and minimizing environmental impact. A significant trend is the adoption of precision agriculture, where farmers invest in tractors equipped with smart technologies to improve productivity.

The Asia-Pacific region is growing rapidly and is expected to grow significantly over the next five years as major developing countries such as India, China and Japan encourage farmers to use tractors by providing subsidies and lowering interest rates on farm machinery loans. The move is likely to boost demand for tractors in these regions.

Tractor Market Trends

The market for sub-40 hp tractors is expected to accelerate over the next five years.

There are interesting trends in the global tractor market. While large, powerful tractors continue to attract attention for their superior performance on challenging terrain and in a variety of applications, tractors under 40 horsepower (hp) are also expected to see significant growth over the next five years.

Known as compact tractors, these tractors typically have an engine capacity of less than 1,500 cc. cm and take up less space. This makes them ideal for basic agricultural tasks such as small farms, maneuvering in small areas, mowing, plowing and light transport.

In recent years, major tractor markets such as India and China have seen positive growth in the sub-40 HP tractor market. Small and medium-sized farms are increasingly using smaller horsepower tractors to improve efficiency and productivity compared to traditional manual labor. Some governments provide grants and loan schemes to encourage small farmers to invest in these tractors, further promoting their adoption.

Manufacturers have realized this increase in demand and are launching new models specifically designed for the sub-40 HP tractor segment. Examples include

1. Mahindra Jio (India): A small tractor known for its maneuverability and efficiency, aimed at small farmers and hobbyists.

2. John Deere 1025R (USA): a versatile subcompact tractor designed for grass cutting, landscaping and light work.

Asia-Pacific will lead the market from 2024 to 2029

Asia Pacific leads the global tractor market due to its vast and diverse agricultural landscape. The region's climate and topography are complex, allowing for the cultivation of a wide range of crops and a variety of farming methods. Since agriculture is the main economic activity in many countries in the Asia-Pacific region, the demand for tractors is initially high. Both small and large farmers rely on tractors for plowing, planting and harvesting, contributing to continued demand across all agricultural sectors.

The Asia-Pacific region is home to the majority of the world's population, and ensuring food security is a top priority for many countries in the region. Tractors play an important role in increasing agricultural productivity and enable farmers to cultivate large areas efficiently. The need to feed a growing population is driving investment in mechanization, making tractors critical to increasing agricultural production and overall food security in the Asia-Pacific region.

Many governments in the Asia-Pacific region recognize the importance of agricultural mechanization for economic development and food production. In response, countries are implementing supportive policies, subsidies and financial incentives to encourage the adoption of modern agricultural machinery such as tractors. Government initiatives aimed at improving agricultural efficiency and adoption of sustainable practices have contributed significantly to the leadership of the tractor market in the Asia-Pacific region.

Agricultural technology is advancing in the Asia-Pacific region, leading to the proliferation of modern and technologically advanced tractors. Precision farming technologies, GPS-enabled tractors and smart farming solutions are gaining popularity in the region. Farmers are increasingly investing in tractors equipped with advanced technology to optimize resource use, reduce environmental impact and improve overall agricultural productivity.

1.August 2023 VST Tillers Tractors, a Bengaluru-based manufacturer of specialty tractors and tillage machines, has announced that it will invest INR 1 billion to set up a dedicated research and development center. This significant investment is aimed at advancing research and innovation in the global agricultural sector. This initiative underscores VST Tillers Tractors' commitment to remain at the forefront of technological advancements and contribute to the advancement of agricultural practices around the world.

2.In August 2023, Mahindra & Mahindra, in partnership with the Japanese company Mitsubishi Mahindra Agricultural Machinery, launched a new range of tractors on the OJA platform in Cape Town, South Africa. The partnership introduced a line of subcompact, compact and small utility tractors ranging from 20 to 40 hp. (14.91-29.82 kW). Mahindra & Mahindra, which has invested INR 12 billion in the OJA platform, plans to launch heavy utility tractors next year, highlighting its commitment to offering a comprehensive range of technologically advanced tractors.