Tractors Market - Growth, Trends, COVID-19 Impact, and Forecast (2022 - 2027)

The Tractors Market is Segmented by Horsepower (Below 40 HP, 40 HP - 100 HP, and Above 100 HP), by Drive Type (Two-wheel Drive and Four-wheel Drive/All-wheel Drive), and by Geography (North America, Europe, Asia-Pacific, and the Rest of the World). The report offers market size and forecasts in terms of value in USD billion for all the above segments.

Market Snapshot

Tractors Market Size
Study Period: 2018-2027
Base Year: 2021
Fastest Growing Market: Asia-Pacific
Largest Market: Asia-Pacific
CAGR: 5.8 %

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Market Overview

The tractors market is valued at USD 70.55 billion, and it is expected to reach USD 98.95 billion, registering a CAGR of 5.8% over the next five years.

The tractor market was impacted negatively by the outbreak of COVID-19, as the lockdowns in various parts of the world disrupted the supply chain during the second quarter of 2020, which impacted the production and sales of tractors globally. However, as the economies reopened, the market is recovering at a high rate, along with new product developments and launches. The increasing demand for tractors is also contributing to the growth of the market.

Over the long term, the key factors contributing to the increase in worldwide tractor sales are increasing farm mechanization rates, especially in developing nations, rising farm labor costs, seasonal labor shortages, and shorter tractor replacement cycles. However, some of the prominent players in the industry are focusing on mergers and acquisitions and new product development in the market. For instance,

  • In October 2022, At Kubota Connect, the manufacturer gave dealers a sneak peek at the new products. Series M7 Generation 4 The Kubota M7s are the company's largest tractors, aimed at livestock and forage producers.
  • In September 2021, TAFE launched the new Massey Ferguson 244 and 246 Dynatrack versions of tractors specifically for West Bengal and Odisha states of India. These tractors are characterized by high utility, advanced technology, and high power.

Governments in emerging markets are also encouraging farmers in their countries and providing farm equipment at subsidized rates and low-interest rates. The demand for farm equipment and tractors is expected to grow at a healthy rate. For instance,

  • According to USDA 2021 Budget, USD 3.3 billion is allocated to support research to advance the competitiveness of US agriculture and promote food security. The budget also supports an estimated 35,000 farmers and ranchers by financing operating expenses and providing opportunities to acquire a farm or keep an existing one.

Asia-Pacific region is expected to witness significant growth in the next five years as emerging key economies like India, China, and Japan are encouraging farmers in their countries by offering subsidized farm equipment and low credit rates to encourage tractor adoption. Such developments are likely to drive the demand for tractors in these regions.

Scope of the Report

A tractor is a vehicle usually available with one or two small wheels in front and two large wheels at the back. It is used in agriculture, construction, and logistics applications to move attached implements such as rotavators, plowing, tilling, sowing, cultivation, and harvesting. 

The tractors market is segmented by horsepower (below 40 HP, 40 HP - 100 HP, and above 100 HP), by drive type (two-wheel drive and four-wheel drive/all-wheel drive), and by geography (North America, Europe, Asia-Pacific, and the Rest of the World). For each segment, market sizing and forecast are given on the basis of value in USD billion.

By Horsepower
Below 40 HP
40 HP - 100 HP
Above 100 HP
By Drive Type
Two-wheel Drive
Four-wheel Drive/All-wheel Drive
By Geography
North America
United States
Canada
Rest of North America
Europe
Germany
United Kingdom
France
Spain
Italy
Rest of Europe
Asia-Pacific
China
Japan
India
South Korea
Rest of Asia-Pacific
Rest of the World
South America
Middle East and Africa

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Key Market Trends

Below 40 HP Tractors Segment's Growth Expected to be Bolstered over the Next Five years

The industry trend toward bigger horsepower tractors continues to grow worldwide, owing to greater performance in difficult terrain and versatility in farm and non-farm applications. The major tractor markets like India and China are recording positive growth across less than 40 HP segments in recent years.

Less than 40 HP tractors are often synonymous with the term compact tractors. With an engine displacement of not more than 1,500 cc, these tractors occupy less space and can be aligned with great flexibility. They are primarily used for mowing but can handle other basic farming tasks, like manure handling.

However, due to the significant volatility that caused the world market during the COVID-19 pandemic, demand for compact tractors fell dramatically in the first quarter of 2020. The imposition of lockdowns in several regions limited mobility and resulted in the closure of retail outlets. This resulted in a market delay, which, in turn, significantly reduced sales.

With the majority of countries that have huge agricultural activity, Asia-Pacific and African regions are witnessing high demand for less than 40 HP tractors, primarily for agricultural activities, as the low cost of these tractors increased the affordability rate among the highly populated small-scale farmers. Several players in the market studied are launching the latest products to gain market share. For instance,

  • In August 2021, Kubota introduced its new LX Series, a range of multi-purpose compact tractors under 40 HP with two different models, namely the 35HP LX-351 Rear ROPS and LX-351 Cab. The new LX tractor features a Stage V engine with CRS, EGR, and DPF and is available in four different models. The LX-351 Rear ROPS and LX-351 Cab, with 35 hp and an HST 3-range transmission, and the LX-401 Rear ROPS and LX-401 Cab, featuring 40 hp and a 3-range HST transmission.

Further factors such as compact size, ease of customization, and nearly 50% more price for the next power range of tractors, are expected to enhance the demand for these tractors. In this power band, the bargaining power of consumers is high, compared to high-powered tractors, given the wide range of options and substitutes from different manufacturers. With the aforementioned trends and developments, it is expected that the Below 40HP tractors segment is likely to have healthy growth over the coming years.

Global  Four-wheeler Tractor sales trend_1

Asia-Pacific Region Anticipated to Lead the Market During the Forecast Period

The tractor market is expected to be dominated by Asia-Pacific, and the region is predicted to develop at the highest rate over the coming years. The growing preference for farm mechanization and an increase in the number of government-funded policies are anticipated to promote the growth of the market in the next few years. For instance,

  • In October 2021, the Indian government announced up to 50% subsidy on buying tractors under the PM Kisan Tractor Scheme. Farmers buying a tractor under the scheme can avail of the benefits and pay half the amount.

Several regional regulatory bodies, such as the China Agricultural Industry Mechanization Association, promote farm mechanization by educating co-operatives and individual farmers about the benefits of using high-horsepower tractors in larger farm areas. A shift toward EVs is also backed by the government, which is helping companies to develop sustainable products. For instance,

  • Monarch Tractor is the manufacturer of the industry's fully electric autonomous tractor. In November 2021, the company and its Farm Electrification Consortium partners received a grant worth USD 3 million from the California Energy Commission (CEC) to accelerate the electrification of agricultural equipment, including tractors, and to demonstrate the ability of batteries in on-farm equipment to keep critical electrical loads running during power outages caused by wildfires. Monarch Tractor, Gridtractor, Rhombus Energy Solutions, Current Ways, and Polaris Energy Services make up the consortium.

The expansion in the number of large agricultural producers and new rural groups engaged in farming contributed to this tendency to stabilize the demand in the market. The introduction of large-scale bespoke hiring service enterprises in agricultural machinery in India fueled the rise in farm mechanization. The subsequent move to automated technologies is envisioned to drive the demand for tractors across the Asia-pacific region. All these aforementioned factors are expected to drive the growth of the market.

Tractors Marke trend_2

Competitive Landscape

The tractor market is moderately consolidated as it witnesses active engagement from several global and regional players. Major players such as Mahindra & Mahindra, Tractor, Kubota Corporation, Farm Equipment Limited, and HMT Limited are adopting agreements and product launches as key developmental strategies to improve the product portfolio of tractor products. For instance,

  • In November 2022, At SIMA 2022, New Holland debuted the T8 tractor with Raven Autonomy, a driverless grain cart harvest application. It incorporates OMNiDRIVE, the world's first driverless agriculture technology for grain cart harvesting. The cutting-edge technology stack allows the farmer to monitor, synchronize, and operate a driverless tractor from the harvester's cab.
  • In October 2021, Mahindra launched three new YuvoTech+ tractors that come equipped with the new-age advanced technology with the highest torque and fuel efficiency. The tractors are available in three models, namely Yuvo Tech+ 275 (27.6 kW-37 HP), Yuvo Tech+ 405 (29.1kW 39 HP), and Yuvo Tech+ 415 (31.33 kW-42 HP).
  • In August 2021, John Deere introduced the new 6155MH Tractor that delivers all field-proven performance and reliability effective for cultivating, harrowing, or pulling harvester trailers.

Major Players

  1. Deere and Company

  2. Kubota Corporation

  3. Mahindra Tractors

  4. CNH Industrial

  5. AGCO Corporation

Deere and Company, Kubota Corporation, Mahindra Tractors, CNH Industrial, AGCO Corporation

Recent Developments

  • September 2022: KAMAZ PJSC announced its plans to expand the model range of gas vehicles. KAMAZ continued to carry out plans for the development of gas-powered vehicles. This includes the completion of K4 generation vehicle production, the modernization of K3 generation vehicles using an alternative component base, and the development and development of K5 generation vehicles. The company's plans include bringing the most popular LNG-powered KAMAZ-54901 long-haul tractors, as well as CNG-powered transport vehicles, to the market.
  • August 2022: Hon Hai Technology Group (Foxconn) signed a contract manufacturing agreement with Zimeno Inc. (dba Monarch Tractor) to manufacture next-generation autonomous tractors and battery packs at the Foxconn Ohio facility in Lordstown.
  • July 2022: In the 4x2 Tractor segment, Ashok Leyland introduced the AVTR 4220 with 41.5T GCW and the AVTR 4420 with 43.5T GCW. These tractors have an H6 Engine - a 6-cylinder engine with i-Gen6 technology, GCW options of 41.5T and 43.5T, and a suitable two-axle trailer.
  • October 2021: Italian tractor implements manufacturer ROC Srl was acquired by Kubota Group company to strengthen Kubota’s Hay and Forage implement products and increase brand power across the European region.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Drivers

    2. 4.2 Market Challenges

    3. 4.3 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.3.1 Threat of New Entrants

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Bargaining Power of Suppliers

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION (Market Size in USD billion)

    1. 5.1 By Horsepower

      1. 5.1.1 Below 40 HP

      2. 5.1.2 40 HP - 100 HP

      3. 5.1.3 Above 100 HP

    2. 5.2 By Drive Type

      1. 5.2.1 Two-wheel Drive

      2. 5.2.2 Four-wheel Drive/All-wheel Drive

    3. 5.3 By Geography

      1. 5.3.1 North America

        1. 5.3.1.1 United States

        2. 5.3.1.2 Canada

        3. 5.3.1.3 Rest of North America

      2. 5.3.2 Europe

        1. 5.3.2.1 Germany

        2. 5.3.2.2 United Kingdom

        3. 5.3.2.3 France

        4. 5.3.2.4 Spain

        5. 5.3.2.5 Italy

        6. 5.3.2.6 Rest of Europe

      3. 5.3.3 Asia-Pacific

        1. 5.3.3.1 China

        2. 5.3.3.2 Japan

        3. 5.3.3.3 India

        4. 5.3.3.4 South Korea

        5. 5.3.3.5 Rest of Asia-Pacific

      4. 5.3.4 Rest of the World

        1. 5.3.4.1 South America

        2. 5.3.4.2 Middle East and Africa

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Vendor Market Share

    2. 6.2 Company Profiles*

      1. 6.2.1 Deere and Company

      2. 6.2.2 CNH Global NV (includes New Holland and Case IH)

      3. 6.2.3 AGCO Corporation (includes Massey Ferguson, Valtra, Fendt, and Challenger)

      4. 6.2.4 CLAAS KGaA mbH

      5. 6.2.5 Mahindra and Mahindra Corporation

      6. 6.2.6 Kubota Corporation

      7. 6.2.7 Escorts Limited

      8. 6.2.8 Tractors and Farm Equipment Limited (TAFE)

      9. 6.2.9 Kuhn Group (Subsidiary of Bucher Industries)

      10. 6.2.10 Yanmar Company Limited

      11. 6.2.11 Deutz-Fahr

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Frequently Asked Questions

The Tractors Market market is studied from 2018 - 2027.

The Tractors Market is growing at a CAGR of 5.8% over the next 5 years.

The Tractors Market is valued at 70 Billion USD in 2018.

The Tractors Market is valued at 98 Billion USD in 2027.

Asia-Pacific is growing at the highest CAGR over 2021- 2026.

Asia-Pacific holds highest share in 2021.

Deere and Company, Kubota Corporation , Mahindra Tractors, CNH Industrial, AGCO Corporation are the major companies operating in Tractors Market.

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