According to a new market report published by Transparency Market Research (TMR), "Agricultural Tractors Market - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast, 2018-2026", the global agricultural tractor market is expected to exceed US$100 billion by 2026, expanding at a CAGR (compound annual growth rate) of more than 4% during the forecast period.
According to the report, the global market is likely to be influenced by a range of political, economic, social, technical, and industry-specific factors. Middle East & Africa is likely to witness rapid increase in demand for agricultural tractors from countries in Africa, owing to the more fertile land near the valley of Nile and other rivers. Moreover, farmers from Africa are adopting automation in agriculture, which leads to increase in demand for agricultural tractors. Consequently, the market in the region is anticipated to expand at a CAGR of 5% during the forecast period.
Increasing demand from consumers for food products and expansion of the farming industry in some regions are likely to boost the agricultural tractors market. According to the VDMA Economic Report 2015, automation in the agriculture industry in China increased from 34% in 2004 to 61% in 2014. Enhanced quality, decrease in production time, and cost-effectiveness are key factors driving the agricultural tractors market. More than 70% of global production of agricultural tractors takes place in China and India, which propels the market share held by Asia Pacific to about 80% of the global agricultural tractor market.
Agricultural tractors having power output between 31 and 100 hp accounted for a larger share of the market for 2017. In terms of power output of tractors, 31-100 hp is anticipated to be a leading segment of the tractors market, owing to adequate efficiency and high demand among farmers. Tractors with power output between 31-100 hp are highly versatile and can be utilized for cultivation of maximum number of crops.
In terms of the drive type integrated in tractors, four-wheel drive (4WD) is a highly attractive segment of the market. Depending on the various systems designed or used, 4WD can provide significant forward traction during acceleration. It is especially helpful to carry out agricultural processes while driving on moderate off-road terrain. 4WD tractors are useful while driving through mud, sand, and other loose surfaces.
The introduction of autonomous tractors has been a major improvement among the numerous technological inventions witnessed in the global agricultural tractors market. Consequently, the autonomous tractors segment is likely to expand at a CAGR of more than 15% during the forecast period. Yanmar Co., Ltd., a prominent player in this agricultural tractors industry, has collaborated with Hokkaido University, Japan, to offer advanced driverless tractors with highly advanced features. CNH industrial, another key manufacturer of agricultural tractors, has begun research and development in the concept of autonomous tractors.
In terms of geography, the global agricultural tractors market has been segregated into North America, Latin America, Europe, Asia Pacific, and Middle East & Africa. Asia Pacific held a major share of the global market in 2017. Higher demand for agricultural tractors from farmers and large number of production of tractors in countries such as China and India are likely to boost the market in Asia Pacific during the forecast period. The market in Europe is not as prominent as other regions despite having larger demand for food products among consumers in the region. This is because most countries in Europe depend on the industrial sector and the region has less land for farming. Furthermore, shortage of labor for farm applications drives automation in the farm industry in Europe, which in turn is likely to boost the market for agricultural tractors in the region.
Optimization in procedures used to manufacture and assemble agricultural tractors, optimization in size, and advancements in materials employed to manufacture tractor components are key factors that fuel the technological advancements in agricultural tractors.
Manufacturers involved in the manufacturing of agricultural equipment, such as tractors, are continuously developing equipment that can boost the production from agriculture. Such development is likely to boost the agricultural tractors market.
The global agricultural tractors market is highly unified as design, manufacturing, and assembling of agricultural tractors require considerably advanced technology, significant investment, skilled workers, and high precision. Furthermore, the market has seen the presence of major tractor manufacturers working in the industry for numerous years. Major share of the agricultural tractors market is held by key global players, as the market is highly consolidated. Major players operating in the global agricultural tractors market include CNH Industrial N.V., AGCO Corporation, Deere & Company, CLAAS KGaA GmbH, Mahindra & Mahindra India Limited, Kubota Corporation, Escorts Limited, Caterpillar, Inc., J.C. Bamford Excavators Limited (JCB), Yanmar Co., Ltd., Tractors and Farm Equipment Limited (TAFE), and SDF Group.
Several key market players are focused on research & development activities in order to improve operation, size, and effectiveness of agricultural tractors.