Market Trends of Asia-Pacific Agricultural Tractors Industry
This section covers the major market trends shaping the APAC Agricultural Tractor Machinery Market according to our research experts:
Increased Farm Mechanization in Developing Countries
Emerging economies, such as China and India, have been at the forefront in the number of tractors being sold across the Asia-Pacific region. China has significantly accelerated the adoption of tractors in recent years and its level of overall development of agricultural machinery is one of the important carriers for modern agriculture and a tool for improving agricultural productivity and liberating agricultural labor shortage. China introduced 'Made in China 2025' scheme which aims at focusing on producing 90% of its own agricultural equipment with high-end machines, like agricultural tractors, holding almost one-third share of their segments by 2020. This scenario is expected to boost the adoption rate of indigenously produced tractors in the country. In order to increase the level of farm mechanization, the Indian government is promoting 'Balanced Farm Mechanization' by providing subsidy on various equipment and by supporting bulk buying through front-end agencies, which is expected to strengthen the tractor market during the forecast period. Bangladesh has witnessed a shift towards automation on its farms, especially in the adoption of tractors. According to the Department of Agricultural Extension (DAE), Bangladesh, around 95% of the land is tilled through pedestrian and wheeled tractors. These developments are further e expected to augment the sales of tractors in the Asia-Pacific region, during the forecast period.
India - The Largest Tractor Market in Asia-Pacific
According to a study by the Indian Council of Food and Agriculture Research, the farm mechanization level in India was recorded at 40%-45% in 2017. There have been several developments in the realm of government initiatives supporting farm-level disposable income and machinery purchases, including tractors. For instance, the state government of Haryana has resumed Sub-Mission on Agricultural Mechanisation (SMAM), which was launched during the 2019-20 budget and would provide a total subsidy of 34.44 crore Rupees for the purchase of 1,588 implements, including tractors. As a result, tractor sales in India expanded drastically from 492,819 units in 2016 to 711,478 units in 2018. According to the Economic Survey by the Government of India, farm mechanization and crop productivity have direct relation, as the use of agriculture machinery, such as tractors, will increase crop productivity by 30% and reduce the cost of cultivation by 20%. Moreover, leading tractor manufacturers are eyeing the capitalization of the burgeoning demand by introducing innovative tractors specific to regional needs. For instance, in 2019, Mahindra & Mahindra, a leading tractor manufacturer launched ARJUN NOVO 605 DI-I, a 50 HP technologically-advanced tractor that can handle 40 applications, including puddling, harvesting, reaping, and haulage, among others.
