Europe Utility Tractor Market is projected to grow at a CAGR of 2.8% during the forecast period (2020-2025). The rise in labor cost and increase in agricultural factor income are some of the factors driving the market for utility tractors in the region. An acute shortage of farm labor has currently surfaced on the farm fields in the region. Compact utility tractors (40HP-70HP) are being increasingly adopted by small-scale farmers as they are much smaller in size than the average agricultural tractors and are priced much lower. In Europe, Germany France, and Italy are the largest markets for utility tractor sales in the region which account for a major share in this segment in the region.
Key Market Trends
Rise in Labor Costs
Farming in Europe is being currently revolutionized by the rapid technological development in utility tractors. The rise in labor cost and increase in agricultural factor income are some of the factors driving the market for tractors which includes utility tractors in the region. An acute shortage of farm labor has currently surfaced on the farm fields in the region. According to the German Association of Agricultural Employers (GLFA), the number of seasonal immigrant labor during the peak harvest times in Germany fell drastically in the last few years, Thus, shortage of farm labor is giving way to rise in wage rates, thereby allowing the farmers to adopt farm mechanization including utility tractors in the region.
Germany Dominates the Market
The biggest tractor market in the European Union are Germany and France. The country generates more than 27% of agricultural machinery and equipment components manufactured in Europe. Thus, Germany has evolved to be one of the leaders in producing agricultural machinery in Europe, which signifies its dominance in the agricultural tractors which includes utility tractors market. Farmers in this region prefer small and customized compact/utility tractors for agricultural purposes due to small farmland sizes. The presence of international companies such as John Deere, kubota corporation and CLAAS KGaA mbH has further driven the market growth for these tractors thereby boosting its market growth
European utility tractor market is highly competitive with the presence of many local and international players. CLAAS KGaA mbH, Deere & Company and AGCO Corporation are some of the major players who are operating in this region. These players are expanding their presence to strengthen their position in the market.
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