Tractors - Market Share Analysis, Industry Trends and Statistics, Growth Forecast (2024-2029)

The tractor market size is projected to be USD 84.8 billion by 2024 and is expected to reach USD 114.5 billion by 2029, growing at a CAGR of 5.90% during the forecast period (2024-2029).

In recent years, the tractor market has grown steadily, influenced by factors such as increased agricultural mechanization, increased demand for high-horsepower tractors and government support for agricultural mechanization. The large size of the market reflects the important role of tractors in improving agricultural efficiency. Adoption of precision farming techniques and demand for sustainable farming methods further contribute to the growth trajectory of the tractor market.

The market is characterized by the presence of world-leading companies such as John Deere, CNH Industrial (Case IH and New Holland), AGCO Corporation (Massey Ferguson and Fendt), and Kubota. These companies compete fiercely to provide tractors with a wide range of power capacities and features to meet the diverse needs of European farmers. Competition is not only focused on products, but also on service and support networks, with after-sales service playing an important role in the agricultural machinery sector.

In the long term, the main factor driving the growth of global tractor sales is the increasing rate of agricultural mechanization, especially in developing countries, rising agricultural labor costs, seasonal labor shortages, and shorter tractor replacement cycles. However, some key industry players are focusing on market mergers and acquisitions and new product development. For example:

Key Highlights

1. French start-up Seederal has announced that it will begin developing electric tractors in 2023. The company is currently building a prototype electric tractor, which is expected to have a powerful output of 160 horsepower. This initiative is in line with the global trend of sustainable agricultural practices and the adoption of electric farm machinery.

2. At Kubota Connect in October 2022, Kubota presented new products to dealers. M7 Series Generation 4 The Kubota M7 is the company's largest livestock and feed production tractor.

Advances in tractor technology are having a major impact on the European market. Precision farming technologies such as GPS guidance systems, remote information processing and autopilots are increasingly being incorporated into modern tractors. These technologies contribute to sustainable agriculture by improving operational efficiency, optimizing input use, and minimizing environmental impact. The adoption of precision agriculture is a significant trend, with farmers investing in tractors equipped with smart technologies to increase productivity.

The Asia-Pacific region is growing rapidly and is expected to grow significantly over the next five years as major emerging economies such as India, China and Japan encourage farmers to use tractors by providing subsidies and lowering interest rates on farm equipment credits. This move is likely to boost the demand for tractors in these regions.

Tractor Market Trends

Growth of the sub-40 hp tractor market is expected to strengthen over the next five years

The global tractor market is witnessing fascinating trends. While large, high-horsepower tractors continue to garner attention for their superior performance in difficult terrains and diverse applications, tractors under 40 horsepower (HP) are also expected to see strong growth over the next five years.

These tractors, known as compact tractors, typically have engine displacement of less than 1,500 cc and take up less space. This makes them ideal for basic agricultural tasks such as small farms, small space maneuvers, mowing, plowing and light transport.

In recent years, major tractor markets such as India and China have witnessed positive growth in the sub-40 hp tractor market. Small and medium-sized farms are increasingly adopting smaller tractors to improve efficiency and productivity compared to traditional manual labor. Several governments are providing grants and loan schemes to encourage small farmers to invest in these tractors, further promoting adoption.

Manufacturers have recognized this increase in demand and are introducing new models specifically designed for the sub-40 hp segment. Examples include

1. Mahindra Jio (India): a small tractor, known for its maneuverability and economy, aimed at small farmers and hobbyists.

2. John Deere 1025R (USA): a versatile subcompact tractor designed for mowing, landscaping and light work.

Asia Pacific is expected to lead the market from 2024 to 2029

Asia Pacific is the leader in the global tractor market due to its vast and diverse agricultural landscape. The region has a complex climate and topography that lends itself to a wide range of crops and farming methods. Since agriculture is the primary economic activity in many Asia-Pacific countries, the demand for tractors is inherently high. Both small and large farmers rely on tractors for plowing, planting, and harvesting, driving continued demand across all agricultural sectors.

The Asia-Pacific region is home to the majority of the world's population and ensuring food security is a top priority for many countries in the region. Tractors play an important role in increasing agricultural productivity and allowing farmers to efficiently cultivate larger areas. The need to feed a growing population has spurred investment in mechanization, making tractors critical to enhancing agricultural production and overall food security in the Asia-Pacific region.

Many Governments in the Asia-Pacific region recognize the importance of agricultural mechanization in economic development and food production. In response, countries have implemented supportive policies, subsidies and financial incentives to encourage the adoption of modern agricultural machinery, such as tractors. Government initiatives aimed at improving agricultural efficiency and sustainable practices have contributed significantly to the leadership of the tractor market in Asia Pacific.

Asia Pacific has embraced the advancements in agricultural technologies leading to the proliferation of modern and technologically advanced tractors. Precision farming technologies, GPS guided tractors, and smart farming solutions are making inroads in the region. Farmers are increasingly investing in tractors equipped with cutting-edge technologies to optimize resource utilization, reduce environmental impact, and improve overall agricultural productivity.

1.August 2023, VST Tillers Tractors, a Bangalore-based manufacturer of specialized tractors and tillers, has announced its intention to invest INR 1 billion in setting up a dedicated research and development center. This significant investment is aimed at promoting research and innovation in the global agricultural sector. This initiative emphasizes VST Tillers Tractors' commitment to remain at the forefront of technological advancements and contribute to the development of agricultural practices globally.

2.In August 2023, Mahindra & Mahindra partnered with Mitsubishi Mahindra Agricultural Machinery of Japan to launch a new range of tractors on the OJA platform in Cape Town, South Africa. The partnership introduced a range of subcompact, compact and small utility tractors with power ranges from 20 to 40 hp (14.91-29.82 kW). Mahindra & Mahindra, which has invested INR 12 billion in the OJA platform, plans to launch the heavy duty utility tractors next year, underscoring its commitment to offer a comprehensive product line of technologically advanced tractors.