Industrial chain construction is the focus of competition in the agricultural machinery industry

According to the China Academy of Commerce Industry Research, the size of China's agricultural machinery market is expected to increase from 561.1 billion yuan in 2022 to 

719.6 billion yuan in 2027, with an estimated compound annual growth rate of 5.1%. From the perspective of industrial pattern distribution, according to the China Enterprise 

Database Qichamao statistics, there are currently 4185 agricultural equipment enterprises in existence or in operation.

We can feel the distinct characteristics of China's agricultural machinery industry from the two sets of data above, with broad market prospects and numerous competing 

enterprises. Especially since 2015, with the supply side structural reform of China's economy, the agricultural equipment industry has also turned around, ending the "golden 

decade" of unconventional development. Steady, low-speed, and high-quality development has gradually become the main tone of the industry's transformation and upgrading 

stage. Along the way, the annual growth rate (YOY) of China's agricultural machinery market has been declining year by year, gradually decreasing from 9.61% in 2019 to 4.38% 

in 2023. It is expected that the growth rate will continue to slightly decrease to 4.15% in 2024.

The market growth rate continues to slow down, and competition becomes increasingly fierce. From the perspectives of location competition and enterprise competition, the 

construction of the industrial chain has become increasingly important and has become the focus of competition in the agricultural machinery industry.

From the perspective of regional competition among provinces across the country, regions with high usage and demand for agricultural machinery may not necessarily be strong 

regions for agricultural machinery output, such as Northeast China and Inner Mongolia, which lag far behind Shandong, Henan, Jiangsu, Zhejiang, and other regions. The 

fundamental reason for this is the difference in industrial chain construction.

After years of development, China's agricultural machinery and equipment industry chain has become increasingly rich, and a comprehensive pattern of manufacturing industry 

clusters has been formed. If the Yangtze River is taken as the boundary, the agricultural machinery industry can be divided into southern and northern industrial clusters. The 

southern industrial cluster, represented by Jiangsu, Zhejiang, etc., gathers manufacturers of paddy field agricultural machinery and equipment, as well as Guangzhou drone 

industry cluster and small hilly and mountainous machinery industry clusters in Chongqing and Sichuan. Further subdivision, such as the rice machine and transplanter 

production cluster in Suzhou, Jiangsu; Diesel engine production base and tractor industry cluster in Changzhou, Jiangsu; Zhejiang Wenling Irrigation Pump Industry Cluster; 

Agricultural machinery and equipment industry cluster in hilly and mountainous areas of Jiangjin District, Chongqing; Shenzhen, Guangdong is known as the "Capital of Drones", 

with over 90% of domestic consumer grade drones manufactured in Shenzhen.

The northern industrial cluster generally refers to industrial clusters in the Central Plains, Northwest, Northeast, etc., mainly consisting of dryland machinery, large and 

medium-sized agricultural machinery and tools. For example, Weifang, Shandong is the largest tractor industry cluster in China; Small scale construction machinery industry 

cluster in Shahe Town, Laizhou, Shandong Province; The agricultural machinery parts industry cluster in Pangkou, Hebei Province; Ningjin, Hebei is a well-known agricultural 

machinery industry cluster in China.

Fundamentally speaking, the formation of regional industrial clusters relies on the driving force of industry leaders and the support and promotion of local government policies.

From the perspective of market competition among agricultural machinery enterprises and brands, the construction of the industrial chain also determines the level of product 

competitiveness. The construction of the industrial chain referred to here is not only the construction of the component procurement system and procurement channels, but also 

specifically refers to the resource control ability, self-made ability, and innovation ability of the core components of the enterprise itself.

As is well known, any agricultural machinery product is not composed of a single component, but is assembled from dozens, hundreds, thousands, or even more parts. Any 

component with poor quality has a high probability of affecting the overall performance of the machine. Therefore, the formation of good technical design is only the initial stage 

of productization, and subsequent processes such as component procurement, process design, self-made processing, assembly control, quality inspection, and running in and 

debugging are essential. As we often say, a clever woman cannot cook without rice, and the "rice" produced by agricultural machinery manufacturing is the "industrial chain" built 

by enterprises.

So far, the world has completed three industrial revolutions and is currently ushering in the fourth industrial revolution. Every revolution is a major reshuffle, and the agricultural 

machinery industry is no exception.

Nowadays, the competition in the agricultural machinery market is becoming increasingly focused, and products determine success or failure. The success or failure of all 

enterprises is closely related to "products". To do a good job in product development, it is necessary to accumulate resources in the industrial chain. The various characteristics 

presented from the industry development show that agricultural machinery enterprises should not only seize the core technology, build a perfect industrial chain, occupy the 

"commanding heights", but also do a good job in product quality assurance and comprehensive upgrading of product reliability, applicability and progressiveness.

Facing global market competition, building a high-level core industry team, improving technological and process levels, strengthening the industrial chain, mastering core 

resources, and filling the gaps in the industry will give us more say. Let us work together to make more and more Chinese agricultural machinery brands shine on the global 

agricultural equipment industry stage.

Author: Speaking of agricultural machinery in a straightforward manner

Source: Agricultural Machinery Information Network