Agriculture machinery and implements market in Japan, an important economic region in the Asia-Pacific region, is characterized by an increase in consolidation and mechanization. Given the high rate of urbanization (Japan is 93.5% urbanized), mechanization, and innovation to fit the needs (crop types, field sizes) of Asian, and in particular, Japanese farmers, is of high priority.
The country has already achieved near complete mechanization. However, as observed in other sectors in Japan, the country is expected to exhibit a slower growth in comparison with its other Asia-Pacific peers. Currently worth $X billion, the Japanese agri-equipment and machinery market is expected to grow at CAGR 5.2% over 2015-2020.
In order to sustain its population growth with high level of urbanization and low level of arable land, Japan strives to increase its agricultural productivity by high mechanization. Technology advancement for developing more efficient products while keeping in mind the country specific requirements will provide opportunities for future growth of the sector. The rate of agricultural sufficiency is nearly half of its requirements, making it imports dependent, becoming another key driver for the government to support further R&D in agri-machinery. Agricultural productivity issues along with less availability of productive land mass are the major restraining factors for the Japanese agri-mechanizing structure.
Starting with common tools of farming like plough and sickle, the agricultural machinery industry has products to offer in every stage of a crop cycle. Here market segmentation is done on the basis of product and phase type: tractors, plowing and cultivating machinery, planting and fertilizing, harvesting machinery etc. Tractor is the most popular purchase; the tractor power per hectare of agricultural land is similar to US, Britain and France.
It is important to note that small and medium ticket items, particularly the small tractor segment accounts for a large portion of sales in this segment in the country. Geographically, it is interesting to note that the country has maximized adoption of urban agriculture, and scaled it to constitute about a third of all yield in the country.
Competitive Landscape
The country is credited with the title of ‘most mechanized’ country in the Asia-Pacific. Naturally, the country has a large number of domestic players, across large, medium and smaller ticket sized segments. The Japanese agricultural machinery and equipment industry is dominated by domestic players like Mitsubishi Agricultural Machinery Co. Ltd, Yanmar Co. Ltd., Iseki Co. Ltd. and Kubota Corporation.
