The Global Farm Tractors Market is Projected to Reach US$87.5 Billion by 2024

Increasing Mechanization of Agriculture to Drive the Global Farm Tractors Market, According to a New Report by Global Industry Analysts, Inc.

GIA launches comprehensive analysis of industry segments, trends, growth drivers, market share, size, and demand forecasts on the global Farm Tractors market. The global Farm Tractors market is projected to reach US$87.5 billion by 2024, driven by the increasing focus shed on mechanization of agriculture to counter increasing labor costs as well as increase productivity in a bid to meet the food requirements of a growing global population.

Demand for tractors primarily stems from the mechanization of agricultural practices. In other words, as the global economy continues with mechanization of agricultural sector, it is expected to be opportunities galore for agriculture machinery, such as tractors. Adoption of agricultural mechanization practices by developing regions, such as India and China, which are substantially unmechanized than the farm sectors in developed markets, is translating into significant opportunities for the tractors market. Apart from the mechanization trend engulfing the agriculture sectors, farm tractor market also stands to gain from the ongoing stress by the governments towards ensuring sufficient food supply for the rapidly expanding population. Demand side economics continue to find favor in the tractors market and include credit availability, scarcity of labor, and subsidies offered by governments towards farm mechanization. Season and weather conditions also dictate demand patterns for the tractors market. For instance, tractor sales are usually high during harvest and planting seasons.

Farm tractors market has been witnessing fluctuating pattern in demand over the past few years. Low commodity prices in the recent past resulted in lower farm incomes, leading to lower expenditure on capital equipment such as tractors. Unfavorable market conditions in China and India, the two largest markets, have been the prime reasons for the lackluster performance of the market in the recent past. In addition, Europe was also impacted by structural problems as well as saturation in the market. The US was the only major market, which provided good growth opportunities with about 30% growth between 2011 and 2016. On the flip side, sales have been increasing for larger tractors around the world, including the key markets of China and India, leading to relatively better results in terms of value sales. With governments in emerging economies of Asia-Pacific and Latin America providing favorable policies for mechanization of agriculture, and subsequent increase in agricultural productivity, the farm tractors market is expected to witness stable long-term growth.

Small land holdings in developing markets poses one of the major challenges for mechanization of agriculture, as mechanization is not viable for such farmers as the initial capital cost of equipment does not outweighs the benefits of increased productivity and output. In addition, volatility in commodity prices also affects farmers’ ability to commit capital for long-term purchases. To counter the viability concerns, rentals for Farm Tractors and other agricultural equipment have been increasing, many times with active support from OEMs. For instance Mahindra, one of the largest manufacturers of Farm Tractors in the world recently launched a tractor share business broadly based on the lines of car sharing service Uber. Apart from providing a multitude of models to meet the requirements of farmers, OEMs have been investing in technological development of tractors. Autonomous Tractors or driverless tractors have been gaining traction in markets such as the U.S., Europe, and Australia. The large farm sizes and shortage of labor provides benefits for farmers to invest larger capital in autonomous tractors. Equipped with sensors, cameras, and GPS devices among others, these tractors enable farmers to remotely analyze the farms and take necessary measures to increase productivity.

As stated by the new market research report on Farm Tractors, Asia-Pacific represents the largest market worldwide, followed by Europe. The region is also forecast to witness the fastest growth among all regions, with a CAGR of 7.6% over the analysis period. China and India represent the largest markets, both in terms of value as well as value. These countries also provide the best growth opportunities owing to the low mechanization of agriculture. Latin America is also expected to offer high growth opportunities. As Latin American economies, especially Brazil, emerge from a slowdown, the Farm Tractors market in the region is expected to witness healthy growth. Africa, with low farm mechanization also provides opportunities for growth. On the other hand, replacement demand and upgrades to technologically advanced products are expected to drive the market in developed economies.

Key players in the market include AGCO Corporation, Argo Tractors S.p.A., CLAAS KGaA mbH, CNH Industrial N.V., CNH Industrial (India) Private Limited, Steyr Landmaschinentechnik AG, Deere & Company, Escorts Group, Daedong-USA Inc., International Tractors Limited, Kubota Corporation, Mahindra and Mahindra Ltd., SDF S.p.A., and Tractors and Farm Equipment Ltd. (TAFE), among others.

The research report titled "Farm Tractors: A Global Strategic Business Report" announced by Global Industry Analysts Inc., provides a comprehensive review of market trends, growth drivers, innovations and launches, and strategic industry activities of major companies worldwide. The report provides market estimates and projections in US$ as well as units for Farm Tractors for all major geographic markets including the US, Canada, Japan, Europe (France, Germany, Italy, UK, Spain, Russia, and Rest of Europe), Asia-Pacific (Australia, China, India, South Korea, and Rest of Asia-Pacific), Latin America (Brazil, and Rest of Latin America), and Rest of World.

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