Market Research Report
Tractors Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)
|Tractors Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)|
Published: April 21, 2021
Mordor Intelligence Pvt Ltd
Content info: 90 Pages
Delivery time: 2-3 business days
The tractors market was valued at USD 66.5 billion in 2020, and it is expected to reach USD 87.45 billion by 2026, projecting a CAGR of 4.68%, during the forecast period, 2021-2026.
The market was negatively impacted by COVID-19 with reduced sales of tractors across the world due to lockdown. For instance, Mahindra and Mahindra, one of the leading tractor manufacturing company announced an estimated loss of 30,000 tractors sales from April to June 2020 as a result of lockdown and other restrictions. This figure came up to 253k units being sold by December 2020 owing to the increasing demand of food production and impacting agriculture directly.
The adoption rate of mechanization in the agricultural sector has been gradually increasing since the past few years. Some of the major factors driving the demand for mechanization are
Government policies and growing mechanization of agriculture are primarily driving tractor market.
Tractors in the 40 HP-100 HP range, generally referred to as utility tractors, are witnessing high demand across the world, including developed and developing countries, due to their capability to handle additional agricultural tasks. They can be fitted with equipment, such as rakes, scrapes, seed drillings, and spreaders. They are ideal for use in mid-size farmland, ranging from 2 hectares to less than 10 hectares. With the rising importance and increase in subsidies pertaining to the agricultural sector, primarily from governments across various regions, a considerable number of small-scale farmers are focusing on adopting tractors within the 40 HP-100 HP segment. This is expected to drive the market's growth during the forecast period. In India,
At times, low-end versions of this category compete with compact tractors and high-end versions compete with the next power band, making them potential substitutes to the other two segments. They have 3-5 cylinders and nearly 30-gallon fuel tanks to suit the additional farm requirements. Any tractor manufacturer that can include other utilities in the tractors of this band is expected to witness growth. In this power band, manufacturers are focusing on introducing four-wheel drive version tractors.
Companies, such as John Deere, are focusing on electrification and zero emission hybrid and electric energy drives. The autonomous and semi-autonomous electric tractors being developed by John Deere have a power range of up to 500 kW, and they increase productivity by nearly 30%.
The COVID-19 outbreak has significantly impacted this segment of the market in Europe and North America. Italy recorded a decline of more than 21% in the sale of tractors in the month of March 2020.
Asia-Pacific Dominates the Global Market
Asia-Pacific dominated the tractors market, and the region is expected to witness the fastest growth rate during the forecast period.
In the Asia-Pacific region, India is the biggest market for tractors, followed by China. India holds the second-largest agricultural land in the world. At 157.35 million hectares, India holds the second-largest agricultural land in the world. The agricultural sector is the backbone of the Indian economy contributing majorly to the country's GDP.
The consistent growth of the agricultural sector is driving the agricultural machinery market in the country. Government initiatives, such as Tractor Subsidy Scheme, Kisan Credit Card, and National Mission on Agricultural Mechanization, have been continuously contributing to the growth of the agricultural machinery market in the country.
Some of the major companies dominating the market studied are John Deere, Kubota Corp., CLAAS, Mahindra & Mahindra Limited, Kuhn Group, Yanmar Co. Ltd, and Escorts, and they capture a significant share of the market in 2020.
In 2019, John Deere led the agricultural tractor market, due to its increased tractor sales in South America, especially from Argentina, and steady growth was observed in the Asia-Pacific region. The other major players in the market are Tractors and Farm Equipment Limited (TAFE), Deutz-Fahr, Sonalika, Force Motors, and Zetor.
The other market shareholders include many domestic and international manufacturers, like Sonalika, Deutz-Fahr, Force Motors, Zetor, Tafe, and Same, who witnessed a significant share of the global agricultural tractors market in 2020.