Tractor Industry Situation Forecast, 2024

Subsidy policy forecast: positive or negative?

The biggest influence on the agricultural machinery industry is the power of subsidy policy, since the implementation of the national subsidy policy in 2004, the domestic agricultural machinery industry has lost its independence and autonomy, demand is no longer the main force determining the market, the subsidy policy is.

At present, the national agricultural machinery purchase subsidy catalog contains 12 categories of 48 subcategories of 175 items, of which the largest category is the tractor, more than 95% of domestic sales of tractors are sold through the subsidy system, that is to say, the dependence of the tractor on the subsidy is more than 95%, and since the beginning of the subsidy in 2004, the tractor has been the focus of subsidies for the product, and has never been absent, indicating the The importance of the tractor, but also explains the seriousness of the tractor on the degree of dependence on the subsidy policy.

Subsidy policy “attitude” “strength” “amplitude” “scale” and so on on the tractor market has a huge impact. Simply put, as long as the subsidy policy on tractors is “friendly”, or even radical, the tractor will enter a period of prosperity, on the contrary, the subsidy policy on tractors “unfriendly”, the tractor market will enter a period of depression, or even the freezing point, so engage in Tractor business enterprises and individuals, if you do not pay attention to the subsidy policy, then in the development of the new year's business plan is undoubtedly “blind riding a blind horse, half of the night in the abyss”, the degree of danger at a glance.

That quite to 2024 for tractor subsidy policy will be"friendly"? "Unfriendly"or "neutral" ? We can see from some of the recent traces of subsidy-related policy initiatives:

First of all, the subsidy policy in 2024 will continue and there will be no major changes in the policy. 2024 National Agricultural Machinery Purchase Subsidy Funds through the financial transfer payments in November has been issued to the provinces, autonomous regions and municipalities with separate plans, a number of places have already been subsidized funds distributed to the local finances, which indicates that the subsidy policy is “nephews playing lanterns - - according to uncle (old)”. - according to uncle (old)”. Undoubtedly, the general direction of the subsidy policy remains unchanged on the tractor business is the biggest appeasement, subsidy policy changes must bear the brunt of the impact of tractor products and the enterprises and practitioners behind them, in the absence of a major dividend, stability is the biggest dividend.

But the subsidy policy “unfriendly” general direction will continue. Starting in November, some major tractor consumer provinces issued a notice of agricultural subsidy policy adjustment, which is targeted at tractor “Sima Zhaoxin - everyone knows”, the general direction is still lower, this is to complete the “2021-2023 Agricultural Machinery Purchase Subsidy Program”, which is the first time that the government has issued the “2021-2023 Agricultural Machinery Purchase Subsidy Program”, which is to complete the “2021-2023 Agricultural Machinery Purchase Subsidy Program”. 2023 agricultural machinery purchase subsidy policy guidance” in the requirements of the three-year tractor subsidy ratio down to 15% of the task, such as Qingdao City, Inner Mongolia Autonomous Region, Anhui Province, Jiangxi Province, Shaanxi Province, Hubei Province, Tianjin, Henan Province, etc. Downward adjustments to the amount of subsidies and subsidies for tractors, the overall view of the end of the year in order to complete the surprise! 15% target.

So the subsidy amount of tractors in 2024, the vast majority of regions nationwide will be adjusted to within 15%, which is a definitive message that the period of high subsidies for tractors is declared to be over, but of course there will be structural dividends, such as it is highly likely that some provinces and regions will introduce local subsidy policies for power shift, CVT tractors or hilly and mountainous tractors, and in 2023, the completed factory certified enterprises are likely to enjoy additional subsidies, etc.

But the general direction of the subsidy policy is still in the “inhibition” and adjustment, since the overall tractor subsidy policy in 2024 is negative, the whole industry will also lack of vitality and heat.

The market forecast: is up or down?

First of all, review the tractor industry sales in 2023. 2023 is a very special year, because the fourth stage of the implementation of the first year of the emission standards for off-road machinery and equipment, on the one hand, the price of the national four tractors rose by 10-30%, artificially raising the user's consumption threshold, and from the use of the value of the national four machines is not higher than the national three machines, no value-added! Price increases will inhibit the enthusiasm to buy, of course, there is the crazy overdraft on the market in 2022, as well as the “unfriendly” subsidy policy, the overall view of the national four new machine sales in 2023 is very dismal, from the National Bureau of Statistics data, from January to November, large-scale enterprises of large and medium-sized tractor production of more than 25 hp was 330,000, from the subsidy system query from January to November, the national four tractor production of more than 25 hp was 330,000, from the subsidized System query January-November state four machine subsidy entry of about 200,000 units, from which we can see that the sales of tractors in 2023 is declining, and the actual sales rate is very low.

With the understanding of the big outline of the sales machine market in 2023, the next prediction of the tractor market in 2024 will have a bottom and foundation.

First of all, from the first part of the subsidy policy has been known to continue to continue the “unfriendly” main tone, and even large and medium-sized tractor subsidy ratio of the national adjustment to 15% or less, for the actual impact of the subsidy policy to see the 2024 year is more unfavorable, coupled with more than 100,000 units of the national inventory of the four cars will be transferred to 2024, of course, but also take into account that some of the invoiced and reported to the police. To a portion of the invoicing and reported subsidies but the actual unsold state three cars should also be transferred to the 2024 actual sales, so multiple shortcomings add up to the 2024 tractor situation is not optimistic.

For the tractor market in 2024, the recent several large factories have held an annual business meeting, from the information disclosed to see the enterprise on the market in 2024 also holds a pessimistic attitude, I asked some experts, optimistic attitude is very little, most people believe that it will be the same as 2021, that is to say, the sales of the whole industry to reach 350,000 units, the author is more recognized this point of view, because in 2022, the two years in 2023, there are special circumstances, but the actual unsold state three vehicles will also be transferred to the 2024 actual sales, 2023 two years have special circumstances, surge and crash are related to policy, and 2024 in the smoothing of special policy factors, return to normal conditions, if you can reach the level of 2021 also belongs to the return of the market.

Forecasting the competitive landscape: centralization or fragmentation? Who are the destabilizing factors?

For this topic, we can understand this way: the general trend, the concentration of the domestic tractor industry will increase, this is a probability event, if the subsidy policy will not have a big change, this trend should not be changed, 2023 1-10 months industry CR10 cumulative sales of about 300,000 units, accounting for 71%, compared to the same period last year, up 8 percentage points, of which a tractor and Leiwo combined The share is about 50%, and the trend of multi-oligarchization is obvious.

The big trend is the law, can't be changed, but in 2024 the domestic tractor industry will still present the phenomenon of multi-oligopoly and “long-tail effect” coexistence, the number of tractor manufacturers will not have a significant reduction, at the same time the industry concentration will be increased, that is, the industry several head of the enterprise's market share will be further increased. At the same time, industry concentration will increase, that is, the market share of several industry leaders will further increase.

This has a lot to do with the subsidy policy of the “universal system” nature. The current subsidy policy is the implementation of equal subsidies, such as 140-160 hp power tractor, multinational brands priced at 300,000, the domestic first-tier brands priced at 150,000, Shandong low-tier brands priced at 90,000, but the state subsidies are uniformly subsidized according to the 23,200 yuan, in this case, many users will choose the price of the relative subsidies for the high model, there will be a “bad money to expel the good money” phenomenon exists. Good money” phenomenon exists, large enterprises can not eliminate competitors through market-oriented means, there will be a unique phenomenon of multiple oligopoly and ‘long tail effect’ coexist.

Of course, there is no need to reason, the domestic demand for 500,000 tractors per year, there are 260 tractor brands, empirically demonstrated that the domestic tractor industry is in a weak state of competition, “big business is not big, small business is not small,” the state of the long term, the competitive pattern of the new entrants is favorable.

This kind of competition pattern is favorable to new entrants. As long as the industry is not ironclad, there are opportunities for small and medium-sized enterprises and new entrants.

In the “Matthew effect” and “long tail effect” coexist at the same time, 2024 domestic tractor market will have some unstable factors, such as Weichai Leiwo and a tow of Dongfanghong Jianghu head of the fight.

Sprint IPO, tractor and wheat harvester is the largest scale pillar, Leiwo may enter the unreturnable, so it is bound to fight to the death as well, so in 2024 YITO Dongfanghong will be the attacking party, Leiwo will also launch a counter-charge, the two powerful forces will be in the middle of the plains, the northeast, Xinjiang and other main battlefield short, and the two big brother's big battle, will inevitably trigger a chain reaction in the whole industry, it is highly likely to be "The gods fight, the people suffer”, the two head of the enterprise to seize the position of the race will trigger a major reshuffle in the industry, the result of the competition is likely to be two major enterprises will be stronger and stronger, and eliminated will be a large number of small and medium-sized enterprises, so small and medium-sized enterprises can not look at the mindset of watching Leiwo and Dongfanghong's lion king fight for supremacy, but rather, how to take advantage of the mixing.

Technology direction prediction: who's in the main channel? Powershift? cvt? electric?

Choice is more important than effort, the wrong direction, the faster you run, the farther away from the goal.

2024 is very likely to be the domestic tractor technology route of the watershed, different enterprises because of the choice of different technical routes and the fate of a world of difference and the end, because choice is more important than effort.

In 2024 for tractor manufacturers, there will be this year, there are the following technology routes: synchronizer shift, power shift, CVT, hybrid, pure electric, engineering machine six.

Different companies have chosen what kind of technology route, which technology route will become mainstream? Enterprise strategy is a trade-off, choice is more important than effort, no one enterprise can make these types of products are good, can accurately judge the industry trend is the most important to the enterprise.

Theoretically speaking, there is no high and low technology route, the reason why we would think that a certain technology is advanced, just stand in the manufacturers' point of view, a good technology route should be able to improve efficiency, reduce costs, use more easily and conveniently, sometimes users need to be ahead of the technology, and sometimes the user likes to go backward in the technology.

From the 2023 Wuhan national meeting can be seen, although the tractor technology route is a bit confusing, but different companies still have a bias, such as a towing preference for steady power shift, Weichai Leivo rely on the back of Weichai's heavy-duty truck supply chain strong CVT, and Ensign, Ward, Junmadao and other up-and-coming brands will be hoping for hybrid or pure electric on the road to overtake, some do not have the ability to develop power shift and CVT of small and medium-sized enterprises (SMEs). Some small and medium-sized enterprises without the ability to develop power shift and CVT want to explore and amplify the potential of mechanical transmission models, as large as possible, there are companies have developed a Fiat chassis 380 horsepower shuttle shift heavy-duty tractors.