The global agricultural machinery market valued at USD 154.44 million in 2019, is estimated to grow at a CAGR of 8.0%, during the forecast period.
- Tractors accounted for over 50% of the market share in the global agricultural machinery market in 2019.
- High demand for agricultural products and increasing farm mechanization rates in developing countries have driven the growth in this 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., CNH Industrial N.V., and others dominating the market.
Key Market Trends
Growing Demand for Farm Mechanisation from China and India
The global market for agricultural machinery in general and tractors, in particular, 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 2019. The trend behind the increase in farm mechanization in China and India has been increased investments in agriculture as well as the government push towards farm mechanization. The Government of China provides both direct and indirect subsidies on agriculture equipment and machinery purchase to the farmers. The investments in farm mechanization have been a result of the increase in the number of large agricultural producers and new rural organizations engaged in farming. The farm mechanization rate in India was 54.80% in 2011 and 59% in 2013. In India, the trend of the emergence of large-scale custom hiring service businesses in agricultural machinery has been fuelling the increase in farm mechanization.
Asia- Pacific - The Fastest Growing Region in Global Agricultural Machinery Market
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 the Asian region, 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 grow at 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, hence 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 N.V., Iseki & Co., Ltd., and Kubota Corporation. The main strategy adopted by the key players has been 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 growing number of government initiatives have driven the demand for agricultural machinery to rise.
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