The Australia Agricultural Machinery estimated to register a CAGR of 4.3% during the forecast period (2020-2025). In Australia, around 4% of the country’s GDP is generated from agriculture. Mechanization of agricultural processes has been advancing steadily in the country. The demand for these machinery has largely been due to the need for improving the quality of productivity, along with the decline in the population involved in farming in the region. Large swathes of land availability enable the country to cover its needs, and export produces to other countries. Going forward, high economic growth is projected in the country over the forecast period, which is further expected to drive the agricultural machinery market. However, a spike in the price of agricultural commodities has posed a threat in the adoption of farming equipment by the farmers in the last few years.
The Australian market is fragmented with a wide-range of companies lowering the bargaining power of manufacturers. Four of the leading operators, together, occupy less than 10% of value share in equipment manufacturing. Companies like John Deere, CNH, etc., have a perceptible presence in Australia but do not have manufacturing units in the country.
Key Market Trends
Growing Preference for Farm Mechanization
Australia tractor market projected to grow at a CAGR of over 8.8% during the forecast period (2020-2025), with the increasing agricultural activities across the country. Growing population with the rise in labor cost, and increasing investments by leading agricultural machinery manufacturers such as Agco, Escort Group, Mahindra & Mahindra, John Deere and Kubota in their tractor product lines will \ influence the tractor market in Australia during the forecast period which in turn will boost the Australia Agriculture Machinery Market. Anticipated growth in tractors market can also be attributed to growing government support, increasing demand for various HP types of tractors and easy availability of financing will drive the market.
Rise in Technological Advancement
Farmers in the region are looking for tractors with tailored features, which can fulfill their needs for effective farming. So, in order to meet consumer demand, many international and domestic agriculture machinery manufacturers are coming up with new technologically-advanced tractors, which can handle various farming applications. For instance, In 2017, Kubota launched several new products for mid-size farms. the M7-1 tractor with 170 horsepower for Australia Farmland.
The premium M7-1 features continuously variable transmission (CVT) and integrated touch screen terminals and emission technologies.
The market is highly competitive owing to the presence of a 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 the growing number of government initiatives have driven the demand for agricultural machinery to rise.
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