The Global Agriculture Machinery market is estimated to register a CAGR of 8.0% during the forecast period. With such a drastic COVID-19 impact, the agriculture machinery industry requested some flexibility for machines to be fitted with transition engines already manufactured and procured before the crisis. As global supply chains were disrupted and manufacturing industries closed down in accordance with government measures to prevent the spread of the virus, the market has slowed down during the pandemic. Tractors accounted for over 50.0% of the market share in the global agricultural machinery market in 2020. High demand for agricultural products and increasing farm mechanization rates in developing countries are driving the growth in the industry. The Asia-Pacific region is expected to grow rapidly over the forecast period, due to the increase in population in countries, particularly India and China, followed by Europe and North America. The market concentration for global agricultural machinery is consolidated with the presence of a few large players, like AGCO Corporation, Deere and Company, Iseki Co., Ltd, and CNH Industrial NV, are dominating the market.
Key Market Trends
Growing Demand for Farm Mechanisation in India
The global market for agricultural machinery is driven by the increasing rates of mechanization in developing countries. Tractors accounted for over half of the market share in the global agricultural machinery market in 2020. The main reason behind the increase in farm mechanization is the decreased percentage of agricultural labour across the globe. Farm mechanisation emerges as an important technological intervention for giving the desired productivity push to the country’s agricultural sector. Moreover, leveraging mechanisation by means of custom hiring services (CHSs) not only helps in increasing agricultural productivity but also identifying ways of increasing the and adoption of mechanised farming by a larger group of small and marginal farmers.
Asia- Pacific the Fastest Growing Region
The Asia-Pacific region is expected to grow rapidly due to the high demand for agricultural products, particularly from India and China, over the forecast period. Within Asian, China dominates in terms of production and sale of agriculture equipment, while India, Japan, and Australia, are expected to contribute a significant share in the global market in the coming years, thereby surpassing Europe as the largest market. The population in the region is rising, driving the need for mechanization of agriculture. Owing to the high demand and increasing labor costs, the tractor market in the region is estimated to register a CAGR of 6.1% during the forecast period. According to the World Bank database, the total population in the Asia-Pacific region is set to reach 4.17 billion in 2030.This further signifies that the demand for food and other agricultural products will continue to grow, thereby surging the demand for agricultural machinery to achieve optimal efficiency in production.
The market is highly competitive, owing to the presence of few prominent players, accounting for more than half of the market. The key players in the market include Deere and Company, AGCO Corporation, CNH Industrial NV, Iseki & Co. Ltd., and Kubota Corporation. The main strategy adopted by the key players is to invest in R&D to encourage innovation and maintain a strong market base. The advent of advanced technologies, like artificial intelligence, robotics, Google Earth, and the growing number of government initiatives are driving the demand for agricultural machinery.
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