Market research company Global Industry Analysts Inc., (GIA), released a new report entitled “Farm Tractors – Global Market Trajectory & Analytics”. The report presents fresh perspectives on opportunities and challenges in a significantly transformed post COVID-19 marketplace.
Tractors hold a pivotal role in farm mechanization and allow farmers to boost productivity and overall yields. Tractors represent the largest segment of the global agricultural equipment market. Considered as the ‘workhorses’ of agriculture, tractors are the most versatile of equipment used in farming. Amid the COVID-19 crisis, the global market for farm tractors estimated at US$66.7 billion in the year 2020, is projected to reach a revised size of US$85.5 billion by 2026, growing at a CAGR of 5.1% over the analysis period.
Tractors up to 30 HP, one of the segments analyzed in the report, is projected to grow at a 5.6% CAGR to reach US$62 Billion by the end of the analysis period. After a thorough analysis of the business implications of the pandemic and its induced economic crisis, growth in Tractors in the 31 HP to 100 HP segment is readjusted to a revised 4.7% CAGR for the next 7-year period. This segment currently accounts for a 16.8% share of the global tractor market.
The U.S. market is estimated at $18 Billion in 2021, while China is forecast to reach $17.3 Billion in 2026
The farm tractors market in the U.S. is estimated at US$18 Billion in the year 2021. The country currently accounts for a 27.09% share in the global market. China, the world second largest economy, is forecast to reach an estimated market size of US$17.3 Billion in the year 2026 trailing a CAGR of 7.9% through the analysis period. Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at 2.8% and 4.6% respectively over the analysis period. Within Europe, Germany is forecast to grow at approximately 3.1% CAGR while rest of European market (as defined in the study) will reach US$19.5 Billion by the close of the analysis period.
The continuously growing demand for quality and safe food products is creating a pressing need for adoption of advanced agriculture machinery, including tractors. The farm tractors market is also gaining from favorable credit facilities for farmers, allowing them to invest in high-end agricultural machinery to push up farm production. Another factor that is bolstering the market growth is shorter tractor replacement cycle, which has dropped from nearly 12 years to 8 years in the recent years, creating high demand for farm tractors. In the present scenario, India offers the best growth opportunities for manufacturers as good monsoons and crops, as well as government push towards increased mechanization through subsidies expected to result positive results in terms of both volumes and value. In addition, the trend towards higher powered tractors also increases average realizations per equipment, driving topline as well as the bottom-line. Similarly, China is witnessing a growing market for larger tractors and declining sales of small tractors, resulting in better average prices.
Tractors in the 101 HP to 200 HP segment to reach $8.7 Billion by 2026
In the global 101 HP to 200 HP segment, USA, Canada, Japan, China and Europe will drive the 3.6% CAGR estimated for this segment. These regional markets accounting for a combined market size of US$5.5 Billion in the year 2020 will reach a projected size of US$7 Billion by the close of the analysis period. China will remain among the fastest growing in this cluster of regional markets. Led by countries such as Australia, India, and South Korea, the market in Asia-Pacific is forecast to reach US$1.1 Billion by the year 2026, while Latin America will expand at a 5% CAGR through the analysis period.