Trends in recent years have been evident for the agricultural tractors market, showing how farmers’ requirements and preferences are changing around the world. One important trend is the growing use of more developed technologies in tractor production. The modern agricultural tractors come with several features including GPS navigation, precision farming capabilities and automatic steering thus boosting the overall efficiency on productivity in operation process.
This technological combination not only simplifies the work but also helps in resource rationalization which makes tractors more ecological. One of the other important tendencies is increasing demand for compact universal tractors. As agricultural operations become more varied and smaller farms proliferate, the demand grows for machines to operate on narrow passageways while executing various tasks.
The advantages of compact tractors are agility and versatility for which they can be used in different fields, from orchard and vineyard management to landscaping.
But the tractor market is being influenced by eco-friendly and sustainable practices adopted within recent years, farmers have chosen to use fuel-efficient and environmentally sound tractors. To meet this demand, manufacturers are introducing cleaner engine technologies on tractors such as those using biodiesel or electricity.
With customers taking more into consideration sustainability in making their purchases, it is also likely that the market will still see this turn towards greener options.
Regarding regional dynamics emerging markets continue to play a crucial role in determining the trajectory of agricultural tractor market. With the country’s growth and changes in agriculture, more tractors are required to replace manual labor.
This has resulted in greater sales and production within the Asian-Pacific as well Latin America. Governmental initiatives and subsidies in some of these regions add to the growth of this agricultural tractor market. The market is also experiencing an increase in autonomous or self-driving tractor technology. Agriculture automation is becoming more common and does not exclude tractors.
Tractors with automated technology provide such benefits as better precision, reduced labor needs, and operational efficiencies. Even though technological area is still developing, continuous studies and development should lead to its implementation in future yielding a new paradigm of agricultural activities. Besides, the tractor components and accessories parts market is increasing. With the aim of improving productivity and functionality in existing tractors, farmers have created a growing demand for aftermarket products.
The Agricultural Tractors Market size was valued at USD 92.91 billion in 2023. The agricultural tractors industry is projected to grow from USD 96.86 Billion in 2024 to USD 144.45 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 4.9% during the forecast period (2024 - 2030). The increased government help to raise farm mechanization, the surge in demand for compact tractors on small farms, and technological advancements are the key market drivers enhancing the market growth.Â
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
A rise in demand for a high-performance tractor for muddy and heavy soil condition drive the growth of the global tractor market. For instance, major players such as John Deere India Private Limited, Mahindra & Mahindra Ltd, and VST Tillers and Tractors Ltd are engaged in offering agricultural tractors with a power output of more than 100 HP. For instance, Deere & Company offers John Deere 6120 B agricultural tractors and mulching applications. It has more reliability, with lower service costs. It is used in agricultural activities such as tilting, sowing, hauling, and puddling. It has a power output of 120 HP with 4 cylinders and a turbocharged John Deere Power Tech engine.
Additionally, numerous businesses have been releasing recent agricultural tractors, permitting them to dominate the market with speedier product introduction and advancements. Various major market players are spending on research and development to produce cutting-edge equipment and retain a strong market position. This major factor drives the sales of tractors in the market. For instance, in 2020, Deere & Company introduced a new 8 Family Tractor line-up that included 8RT two-track tractors, 8R wheel tractors, and the industry's first fixed-frame four-track tractors. These unique tractors come equipped with the latest precision agriculture technology and permit customers to choose the best machine configuration, options, and horsepower to fit their operation.
However, the increased government support to raise farm mechanization for obtaining high yield by providing subsidies is helping to increase the number of tractors. Technological advancements also cater to the increased mechanization and raising awareness among farmers about the benefits of farm mechanization positively impacts the growth of the agricultural tractors market revenue.
The Agricultural Tractors Market segmentation, based on engine power, includes below 40 HP, 40 HP–120 HP, 121 HP–180 HP, 181 HP–250 HP, and more than 250 HP. The below 40 HP segment held the majority share 2021 of the Agricultural Tractors Market revenue. The high growth can be attributed to the low cost, compact size, and greater convenience offered by less than 40HP tractors to perform all basic farming operations. However, 40 HP–120 HP is the fastest-growing category over the forecast period due to the rising demand for high-power agricultural tractors for more than 10-hectare farm sizes is expected to be a long-term factor.
The Agricultural Tractors Market segmentation, based on application, includes harvesting, seed sowing, irrigation, and others. The harvesting segment dominated the market in 2021 and is projected to be the faster-growing segment during the forecast period, 2024-2030. This is due to the increasing demand for an agricultural trucks for harvesting. However, irrigation is the fastest-growing category over the forecast period due to the growing demand for food and rising water scarcity globally, which positively impacts the market growth.
The Agricultural Tractors Market data has been bifurcated by type into ICE and electric. The electric segment dominated the market in 2021 and is projected to be the faster-growing segment during the forecast period, 2024-2030. This is attributed due to the growing popularity of autonomous and electric agricultural tractors. However, ICE is the fastest-growing category over the forecast period due to technological advancement and the upgradation of mechanical processes.
Based on operation, the global agricultural tractors industry has been segmented into manual tractor vehicles and autonomous tractor vehicles. Autonomous tractor vehicles held the largest segment share in 2021. Manufacturers are investing in developing electrically powered autonomous tractors to expand their product portfolio. However, manual tractor vehicle is the fastest-growing category over the forecast period. The high availability of manual tractors drives the segment's growth. Manual tractors are less expensive than autonomous tractors, and a wide range of agricultural tractors market are available for farmers.
Based on driver type, the global agricultural tractors industry has been segmented into 2-wheel drive and 4-wheel drive. 2-wheel drive vehicles held the largest segment share in 2021. Low upfront costs and better maneuverability are long-term factors expected to drive the demand in the 2-wheel drive segment. However, 4-wheel drive is the fastest-growing category over the forecast period owing to the increasing demand for high-power agricultural tractors to perform various agricultural tasks efficiently.
By Region, the study provides market insights into North America, Europe, Asia-Pacific and Rest of the World. The North America agricultural tractors market accounted for USD 37.71 billion in 2021 and is expected to exhibit a significant CAGR growth during the study period. This is attributed to the presence of the region's key players as the market's supporting factor. Technological advancement in these regions is expected to propel the demand for automated agricultural tractors. Increasing demand for agricultural products in North America's food and beverage industry is anticipated to drive market growth in the region.
Further, the major countries studied in the market report are: The U.S, Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.
Europe agricultural tractors market accounts for the second-largest market share due to the increased demand for large farm tractors, particularly from Italy, Greece, and Lithuania. In addition, the high demand for autonomous tractors is expected to drive regional market growth over the forecast period. Further, the Germany agricultural tractors market held the largest market share, and the UK agricultural tractors market was the fastest growing market in the European region.
The Asia-Pacific agricultural tractors Market is expected to grow at the fastest CAGR from 2024 to 2030. The agricultural sector's strong presence in emerging Asia-Pacific countries, including China, India, and others, has made Asia-Pacific the largest market for agricultural machinery. Moreover, China agricultural tractors market held the largest market share, and the India agricultural tractors market was the fastest-growing market in the Asia-Pacific region.
Major market players are spending a lot of money on R&D to increase their product lines, which will help the agricultural tractor market grow even more. Market participants are also taking a range of strategic initiatives to grow their footprint globally, with key market developments such as new product launches, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations. Competitors in the agricultural tractor industry must offer cost-effective items to expand and survive in an increasingly competitive and growing market environment.
One of the primary business strategies manufacturers adopt in the global agricultural tractors industry to benefit clients and expand the market sector is manufacturing locally to reduce operating costs. In the agricultural tractors market, major players such as Deere & Company, CNH Industrial, SDF, Mahindra & Mahindra Limited, and others are working to expand the market demand by investing in research and development activities.
New Holland is a global full-line agricultural machinery manufacturer. Founded in 1895 as an American company, today, it is an Italian brand. New Holland agricultural products include agricultural tractors, combine harvesters, balers, forage harvesters, self-propelled sprayers, haying tools, seeding equipment, hobby tractors, utility vehicles and implements, and grape harvesters. In October 2020, New Holland Agriculture, one of the leading agriculture brands, announced a 6-year transferable warranty on all the tractors sold in India, effective from 2nd October 2020. This offer assisted the company in strengthening the trust of consumers in the quality and durability of their agricultural tractors.
Also, Deere & Company is an American corporation that manufactures agricultural machinery, forestry machinery, diesel engines, heavy equipment, drivetrains (axles, transmissions, gearboxes) utilized in heavy equipment, and lawn care equipment. The company also delivers financial services and other related activities. In August 2021, Deere and Company acquired Bear Flag Robotics, an AgTech company, for USD 250 million. It would help the former company to meet consumer demands and increase its customer base.
November 2022: ZETOR TRACTORS and VST Tillers Tractors Ltd launched two best-in-class tractors at the CII Agro Tech India 2022 presentation. These 45 HP and 50 HP segment tractors are jointly generated by VST & ZETOR at their India & Czech Republic plants.
November 2021: CNH Industrial N.V. signed a long-term agreement with Monarch Tractor, an AgTech company, to develop fully electrified autonomous agricultural tractors. The initiative would enable the former company to increase its product portfolio.
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