Delhi, Jan. 27, 2022 (GLOBE NEWSWIRE) -- The global tractor market is being driven by several factors, including increasing farm mechanization rates, increasing automation in agriculture industry, rising labor costs, seasonal labor shortages, and shorter tractor replacement cycles…
A study recently conducted by the strategic consulting and market research firm, BlueWeave Consulting, revealed that the global tractor market was worth USD 67.4 billion in 2021 and is further projected to reach USD 98.0 billion by 2028, at a CAGR of 4.4% during the forecast period (2022-2028). The global tractor market is being driven by several factors, including increasing farm mechanization rates, increasing automation in agriculture industry, rising labor costs, seasonal labor shortages, and shorter tractor replacement cycles. The emergence of organic farming and growing demand for food products around the world have also supported the growth of the global tractor market. Additionally, the integration of AI into agricultural equipment and the emergence of Farming 4.0 is expected to create lucrative growth opportunities for the global tractor market during the forecast period.
Emergence of electric tractors is expected to present growth opportunities for the global tractor market
Farming is one of the most essential jobs on the planet and the carbon footprint of farming is one of the most important issues around the world. According to the Consultative Group on International Agricultural Research (CGIAR), the global food system, including fertilizer manufacture to food storage and packaging contributes more than one-third of global greenhouse gas (GHG) emission. According to International Energy Agency, India accounted for 7% of global greenhouse gas emissions in 2018 with agriculture and livestock contributing around 18% of total national GHG emissions.
The World Economic Forum has estimated that if only 15-20% of farms around the globe adopted precision farming by 2030, yield could increase by 10-15% with GHG emission and water use reduced by 10% and 20% respectively. Tractors that run on electricity can dramatically reduce the carbon footprint of the agriculture industry. Furthermore, electric tractors are more efficient, with almost 90% efficiency, compared to conventional diesel tractors with 45% efficiency. Moreover, electric tractors require less maintenance because there are fewer moving parts. All these factors are contributing largely towards the growing acceptance of digital farming techniques and are expected to drive the global tractor market during the forecast period.
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Growing emphasis on organic farming is expected to propel the growth of the global tractor market
With an increasing focus on sustainable development and healthy eating, the demand for organic food is growing day by day. According to the Organic Trade Association, organic farming can eliminate 500 million pounds of persistent and harmful pesticides from entering the environment annually. The British Department for Environment, Food and Rural Affairs, states that organic crops and dairy farming use 35% to 74% less energy than conventional crop and dairy farming. Additionally, organic farming helps in reducing nitrogen run-off-induced pollution and protects the environment. Healthy soil formation and reduced carbon dioxide emission.
Since organic farming do not support the use of synthetic chemical fertilizers and pesticides, transgenic species, or antibiotics and growth-enhancing steroids, or other chemicals, the proper ploughing and timing harvesting of the crops become essential, further creating a growing demand for tractors. Additionally, organic farming require organic fertilizers like compost and biosolids with proper mixing of these fertilizers during ploughing and tractors allow farmers to do that easily. Therefore, the growing demand for organic farming and organic food products is expected to propel the growth of the global tractors market during the forecast period.
2 WD Segment Dominates the Global Tractor Market
Based on wheel drives, the global tractor market is segmented into 2 WD and 4WD. In 2021, 2 WD segment dominated the market and held the larger share owing to growing investment in redesigning of 2 WD tractors and low cost of investment. Additionally, 2 WD tractors cost significantly less than 4 WD tractors and are the preferred choice in developing nations, such as India and Brazil. Moreover, ease of operation, small turning cycle, and design for primary farm functions are some other factors contributing to the dominant share of the segment in the global tractor market.
Impact of COVID-19
The COVID-19-pandemic affected all the industries around the world and had a severe effect on the tractor industry as well. The manufacturing of tractors went down drastically in 2020 as companies were unable to procure raw materials, components, and other parts of tractors for assembly and manufacturing. India, one of the major countries in the global tractor market, registered an exponential increase in tractor sales owing to better monsoon, easy finance schemes, and increased MSP. The tractors sales in India increased by 35.49% YoY in December 2020, according to the Federation of Automobile Dealers Associations of India (FADA).
Though the sales of tractors plunged during the second wave of the COVID-19; however, growing vaccination and reinforcement of supply chains led to swift recovery of the market. The sales have gone down again in December 2021 owing to the emergence of the Omicron variant of the COVID-19; however, the market is expected to recover swiftly in 2022.
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Global Tractor Market: Regional Insights
Based on regions, the global tractor market is classified into North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa. In 2021, the Asia-Pacific region dominated the market and held the largest market share. The presence of leading tractor manufacturers, along with the availability of large area of agricultural lands, and several agriculture-based economies have supported the dominant share of the market in the global tractor market. India and China are the top five countries with highest agriculture land. India had 60.43% of agriculture land in 2018 and China had 56.08% in 2018, as per the World Bank data. The growing investment in renewables is expected to create growing demand for electric tractors in the region and support the growth of the tractor market in the Asia Pacific region during the forecast period.
Global Tractor Market: Competitive Landscape
The Leading Players in the Global Tractor Market are Deere & Company, Mahindra & Mahindra, and Sonalika International Tractors Limited. Other players operating in the market include Kubota Corp., AGCO Corporation, Escorts Limited, CNH Industrial N.V., Tractors and Farm Equipment Ltd., HMT Limited, Force Motors Limited, Massey Ferguson Limited, Fendt, SDF, CLAAS KGaA mbH, ZETOR TRACTORS a.s., Changzhou Dongfeng Agricultural Machinery Group Co. Ltd., Yanmar Co. Ltd. (Yanmar Holdings Co., Ltd.), Arbos Group, Daedong Corporation, and other prominent players.
The global tractor market is a fragmented market with numerous major players operating in the market. The new companies are battling with established players to gain a significant share in the market. Collaboration, merger & acquisitions, partnerships, and launch of new projects are some of the strategies adopted by the players operating in the global tractor market to gain an advantage over their competitors.
Recent Development
In December 2021, SDF announced the expansion of its strategic partnership with DEUTZ. Both the companies share a long common history and look back on a long-term business partnership dating back to the end of the 1980s. The companies have agreed upon a long-term supply agreement for the supply of both the sub-4 liter as well as the above-4-liter range engines and the supply of DEUTZ TCD 4.1, 6.1 and 7.8 engines.
In January 2021, Escorts Agri Machinery (EAM) announced that it registered a drop of 39.3% year-on-year (YoY) in December 2021 with only 4,695 tractors sold as against 7,733 tractors sold in December 2020. However, Escorts’ tractor exports registered an increase of 22.3% YoY in December 2021 and reached 615 tractors against 503 tractors in December 2020.
The in-depth analysis of the report provides information about growth potential, upcoming trends, and statistics of the global tractor market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends of the global tractor market and industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyses the growth drivers, challenges, and competitive dynamics of the market.
Scope of the Report:
| Attribute | Details |
| Years Considered | Historical data – 2018-2021 |
| Base Year – 2021 | |
| Forecast – 2022 – 2027 | |
| Facts Covered | Revenue in USD Billion |
| Market Coverage | North America (US, Canada), Europe (Germany, France, UK, Spain, Netherlands, Italy, Rest of Europe), Asia-Pacific (China, India, Japan, South Korea, Rest of APAC), Latin America (Argentina, Brazil, Mexico, Rest of LATAM), Middle East & Africa (South Africa, Saudi Arabia, UAE, and Rest of MEA) |
| Product/Service Segmentation | By Horsepower, Wheel Drive, Mechanism, Application, Region |
| Key Players | Key players for Deere & Company, Mahindra & Mahindra, Sonalika International Tractors Limited, Kubota Corp., AGCO Corporation, Escorts Limited, CNH Industrial N.V., Tractors and Farm Equipment Ltd., HMT Limited, Force Motors Limited, Massey Ferguson Limited, Fendt, SDF, CLAAS KGaA mbH, Zetor Tractors a.s., Changzhou Dongfeng Agricultural Machinery Group Co. Ltd., Yanmar Co. Ltd. (Yanmar Holdings Co., Ltd.), Arbos Group, Daedong Corporation, and other Prominent Players |
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