Agricultural Tractors Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

Market Overview

The global agricultural tractors market was valued at USD 60,468.9 million in 2020 and is projected to reach USD 81,909.0 million by 2026, while registering a CAGR of 5.2% over the forecast period (2021-2026).

The COVID-19 had a detrimental impact on the market, resulting in lower tractor sales around the world due to the lockdown. For example, Mahindra and Mahindra, a renowned tractor manufacturer, predicted a loss of 30,000 tractors in sales from April to June 2020 as a result of the lockout and other limitations. Due to rising demand for food production and direct impact on agriculture, this figure increased to 253k units sold by December 2020.

Row crop tractors are the largest agricultural tractor segment in the global market. Several major market players are spending in research and development, in order to produce cutting-edge equipment and retain a strong market position. In 2020, Deere & Company launched a new 8 Family Tractor line-up that includes 8R wheel tractors, 8RT two-track tractors, and the industry’s first fixed-frame four-track tractors. These new tractors come standard equipped with the latest precision agriculture technology and allow customers to choose the machine configuration, options, and horsepower to best fit their operation. 

Asia-Pacific is considered one of the fastest-growing markets because the cost of labor has been increasing at very high rates, and the cost of farm labor is directly proportional to the cost of production, thereby, increasing labor wages, and the lack of farm labor has led to the increasing rates of mechanization in the region. This is driving the growth of the tractor market in the region. In addition, numerous businesses have been releasing new agricultural tractors, allowing them to dominate the market studied with speedier product launches and advancements.

Scope of the Report

For the purpose of this report, the tractor used in agricultural operations in farming has been considered. The report does not cover other agricultural machinery and attachments to the tractor. The tractor used for industrial and construction purposes are also excluded from the study.​ The report on the agricultural tractors market is segmented on the basis of tractor horsepower, tractor type, and geography.

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Key Market Trends

Increasing Farm Mechanization in Developing Markets Driving Lower Engine Power Tractor Sales

With an engine volume of not more than 1,500 cc, these tractors occupy less space and can be used with greater flexibility. Ease of customization makes them more amenable to experimentation, and consequentially, manufacturers are willing to try new components and technologies in this segment before moving on to high-powered ones. These tractors are compact, with a mass of fewer than 4,000 lbs, and use less than 40 PTO HP to run attachments. Invariably, all these high-production, economical, and user-friendly compact tractors are being used by schools, parks, landscapers, cemeteries, and hobby farmers. Low horsepower tractors work well in soft soil conditions, such as river basins. The less than 40 HP tractors are mainly used for horticulture. In developing countries, the demand for lower HP tractors is high due to the low disposable income of farmers and high labor costs. Farmers prefer small and customized tractors for agricultural purposes due to small farmland sizes. Moreover, lesser fuel consumption by small tractors helps empower small and marginal farmers. Like India, the governments of developing countries are promoting farm mechanization by subsidizing the purchase of equipment and supporting bulk buying through front-end agencies.

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