The Global Agriculture Tractors Market is projected to witness a growth opportunity of US$ 38,621.2 million during the period 2022-2030. The market is estimated to reach US$ 98,798.5 million by 2030, registering a CAGR of 5.8% during the forecast period. Market growth is expected to result from a range of socio-economic factors, including the growing financial support of governments for the promotion of the agriculture sector, the rising adoption of mechanized farming practices, and an increasing number of farmers in developing countries of Asia Pacific and Africa. Growing cultivation of high-value crops and demand for organic farms has further necessitated the demand for heavy farm equipment such as agriculture tractors. Therefore, it is expected that the global market for agricultural tractors will see robust growth during the forecast period.

The market is also benefitting from the rising efforts of manufacturers to introduce innovations in tractors with the latest and smart technologies aimed at making farm activities easier. Increasing awareness regarding the benefits of such advanced farm equipment in modern agriculture is considered pivotal to market growth worldwide. Furthermore, with more people migrating to cities, there is a lack of farm laborers in many countries globally, which is pushing the demand and usage of tractors. 

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Competitive Landscape:

Leading players hold a substantial share in the market, accounting for more than 50% of market revenue in 2021. This makes the market highly competitive in nature. However, the rising competition and increasing focus of market players on consolidation strategies are expected to transform the competitive landscape to oligopolistic towards the end of the forecast period. Some of the key players in the market are Deere & Company, Mahindra & Mahindra Ltd. India, Sonalika Group, and CNH Industrial America LLC. Other prominent players in the market include Massey Ferguson Ltd., Escorts Ltd., Kubota Corporation, AGCO Corp (Fendt), SDF S.p.A. (Deutz Fahr), New Holland (CNH Industrial N.V.), and Claas Group. The market players are adopting various strategies such as mergers, acquisitions, and new product launches to stay competitive.

Recent strategies adopted by key market players are:

• In October 2021, Mahindra & Mahindra Ltd.’s Farm Equipment sector unveiled the Yuvo Tech+ range of innovative tractors. The new tractors are powered by an mZIP 3-cylinder engine with greater cubic capacity technology, delivering the best power and fuel economy in the category. The Yuvo Tech+ range features 12F (forward) + 3R (reverse) transmission technology, as well as a three-speed range option (H-M-L) based on soil type and farm applications.
• In August 2021, Sonalika released its new 'Sonalika Agro Solutions' tractor and equipment rental app to bridge the gap between farmers and high-tech agricultural machinery. The website connects farmers with many machinery renters in their area who rent out high-tech agricultural implements. Farmers can select from a variety of solutions based on their preferences and needs.
• In December 2021, Case IH and MacDon Industries Ltd. established a collaboration to provide co-branded draper headers for Case IH Axial-Flow combines. Except for South America, the new line of draper headers would be available for order in early 2022 from Case IH Dealers worldwide.

Factors leading to the growing presence of players in the agriculture tractors market are:

Rising demand for high-performance tractors and encouraging government initiatives

The demand for high-performance tractors for muddy and heavy soil conditions has increased across the globe in recent years. In response to this, leading market players like Mahindra & Mahindra Ltd. and John Deere India Private Limited have introduced tractors with a power output of more than 100 HP. The superior performance of these tractors in hard soil terrains and the multi-purpose applications in farming activities such as planting, and sowing have been driving the market growth.

This is coupled with favorable government initiatives that are prompting more farmers to adopt agriculture as a source of livelihood. For instance, the Canadian government’s Canadian Agricultural Loans Act (CALA) enables farmers to borrow up to US$ 500,000 to purchase land or tractors. Furthermore, governments in developing countries, like India, promote farm mechanization by subsidizing equipment purchases and offering assistance with bulk purchases through front-end organizations. Owing to these factors, the market for agricultural tractors is anticipated to grow at a healthy rate throughout the projection period.

Growing demand for farm mechanization in developing markets

Low power tractors witness high demand in developing nations owing to low disposable incomes and high labor costs. Most of the small and marginal farmers in developing economies use smaller and specialized tractors for agricultural applications that use lesser fuel and room and are suitable for a variety of terrains. To meet the rising demand from developing nations, leading market players are introducing innovative products tailored to the demand in developing countries. Low horsepower tractors are ideal in areas with soft soil, including river basins. Tractors with less than 40 horsepower are mostly used in horticulture. Manufacturers are focusing on customizations and the development of innovative components and technologies in this category.

Current trends in the market

Product Innovation in Agriculture Tractors Market

Leading market players are applying smart marketing strategies and growing their distribution networks to cater to a wider market. Companies are also investing increasingly in R&D activities to develop innovative, high-powered tractors. Advancements in the field of driverless tractors are expected to drive demand as these machines help reduce the cost of hiring a driver. Several market players are introducing innovative autonomous tractors that come with the latest machine learning and data analysis functions to improve operational efficiency, crop yield, labor productivity, and safety. 

Factors restraining market growth

High cost of manufacturing agriculture tractors

With the growing demand for food around the world, there is an increasing focus on agricultural production and food security along with many favorable government initiatives which are aiding in the adoption of tractors, thereby propelling the market growth. Product efficiency and cost-effectiveness are crucial for deciding the type of tractor to use. With presence of large number of small and medium farmers globally, companies must ensure that they launch the latest products with upgraded features at an affordable price. With the growing complexity and sophistication of tractors, companies must undertake higher R&D and provide products at a lower cost. This could negatively impact the profit margins of market players and hinder their development in the market.

Impact of COVID-19 on Agriculture Tractor Market 

Agricultural businesses were one of the least affected sectors during the pandemic. With job losses and large-scale unemployment, people went back to agriculture as their source of livelihood in many developing countries. However, with the government-imposed lockdown and other restrictions, there was a shortage of farm equipment and agriculture tractors due to the closure of production facilities worldwide. The closure of dealership networks and supply chain disruptions hampered the demand for tractors. 

However, from the third quarter of 2020, the agriculture tractor market started recovering due to the rise in demand for farm equipment and favorable government programs for promoting the growth of the agriculture sector. Therefore, even though the COVID-19 pandemic negatively impacted the market in the short run, it is expected to make a rapid recovery during the forecast period due to rising agricultural activities. 

Market Segment Analysis

By Tractor Type 

Based on tractor type, the utility tractors segment is expected to register the fastest CAGR of 7.7% over the forecast period. The growth of the utility tractors segment can be attributed to the lower price point of utility tractors, making them accessible to a large group of small farmers. Furthermore, these tractors can perform multiple tasks such as loading, digging, and cultivation even in tight spaces. 

The implement carrier tractors segment accounted for a market size of US$ 12,807.3 Mn in 2021 and is expected to expand at a robust CAGR of 6.1% over the forecast period. Implement carrier tractors are used for several activities, including spraying, drilling, and loading. Countries like Canada, China, and the U.S., which have large farmlands and huge cultivation areas, use implement tractors. With more farmers from developing countries entering the higher income bracket, the demand for such tractors is likely to shoot up in the near future. 

Product (Fuel) Analysis

In terms of product (fuel), the Internal Combustion Engine (ICE) segment held the lion’s share of 80% of the global market in 2021, followed by the electric motor segment, which is expected to register a higher CAGR of 6.3% over the forecast period. Factors such as growing environmental concerns, increased demand for sustainability solutions, and the global rise in electrification are pushing the market for electric motors, which prove to be environment-friendly and cost-efficient in the long run. Moreover, the zero-noise pollution of electric motors, the rise in the number of government initiatives aimed at reducing the carbon footprint of the agricultural sector, and the rapid adoption of electric vehicles are pushing the segment growth. 

Engine Power Analysis

Based on engine power, the 36-50 horsepower engine segment held 31% of the market in 2021. The high demand for tractors in this power range among the majority of the small and medium farmers is due to their low cost and compact size. The size is suitable for small farms and offers greater convenience to perform tasks on a smaller scale. The segment has witnessed promising growth opportunities in the developing economies of Asia Pacific region where a high percentage of the population is dependent on agricultural activities. 

The 90-120 horsepower engine segment is expected to register a 6.9% CAGR during 2022-2030. This can be attributed to the fact that large farmers prefer bigger tractors, which can perform multiple tasks. The richer farmers of North America and Europe along with large landowners in Asia Pacific region are driving the growth of this segment.

Wheel Type Analysis:

Based on wheel type, the 2-wheeler segment dominated in 2021 and was valued at US$ 45,450.9 Mn. The segment is expected to register the highest CAGR of 6.1% over the forecast period. The segment growth can be attributed to the increasing demand for compact 2-wheeler tractors among hobby and professional farmers in both developed and developing countries. Moreover, the versatility of 2-wheeler tractors, low upfront cost, and high mobility in small lands make them a popular choice among farmers. 

A 4-wheeler tractor, on the other hand, packs greater power, which enhances its ability to perform in wetlands and undulating terrains. However, the high cost associated with a 4-wheeler tractor limits their usage only to large farmers with large farmlands.

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Regional Analysis:

Asia Pacific held the lion’s share of the global agriculture tractors market in 2021 with a share of more than 57%. The market in India is expected to account for as much as 30-40% of the total demand for tractors in Asia Pacific in the next few years. Around 695,900 units of Agriculture Tractors were sold as of 2021 in the region. Furthermore, the region is the largest producer of agricultural equipment in the world, due to its high dependence on agriculture as a source of livelihood for many developing South Asian countries.

Furthermore, the developing countries of Latin America and Africa are expected to demonstrate rising demand for agriculture tractors. With a decline in subsistence farming, these economies are seeing significant adoption of commercial agricultural practices.

Segmentation Overview

The Global agriculture tractor market is segmented into:

By Tractor Type Outlook (Value and Volume, 2017 - 2030)

• Utility Tractors
• Row Crop Tractors
• Garden Tractors
• Orchard Type Tractors
• Rotary Tillers
• Implement Carrier Tractors

By Product (Fuel) Outlook (Value and Volume, 2017 - 2030)

• Internal Combustion Engine (ICE)
• Electric Motor

By Wheel Type Outlook (Value and Volume, 2017 - 2030)

• 2-wheeler
• 3-wheeler
• 4-wheeler

By Engine Power Outlook (Value and Volume, 2017 - 2030)

• <20 Horsepower
• 21-35 Horsepower
• 36-50 Horsepower
• 51-90 Horsepower
• 91-120 Horsepower
• 121-150 Horsepower
• 151-180 Horsepower
• 181 HP-250 Horsepower
• >250 Horsepower

By Region Outlook (Value and Volume, 2017 - 2030)

• North America
  • The U.S.
  • Canada
  • Mexico
• Europe
  • Western Europe
    • The UK
    • Germany
    • France
    • Italy
    • Spain
  • Rest of Western Europe
    • Eastern Europe
    • Poland
    • Russia
    • Rest of Eastern Europe
• Asia Pacific
  • China
  • India
  • Japan
  • Australia & New Zealand
  • ASEAN
  • Myanmar
  • South Korea
  • Rest of Asia Pacific
• South America
  • Argentina
  • Brazil
  • Rest of South America
• Middle East and Africa
  • UAE
  • Saudi Arabia
  • South Africa
  • Rest of MEA