The Germany Agricultural Machinery Market is projected to register a CAGR of 3.8% during the forecast period (2021-2026). The purchasing interest of agricultural machinery by farmers is hampered due to Covid-19 related restrictions and decreased farmers' income. As supply chains were disrupted and manufacturing industries closed down in accordance with government measures to prevent the spread of the virus, the market is slowed down during the pandemic. Germany is one of the largest markets for agricultural machinery and implements in Europe supported by the large turnover for this industry in the country. The country is one of the largest exporters of agricultural machinery in the world, the largest manufacturer, and the second-largest consumer of agri-machinery in Europe. German agricultural machinery is preferred worldwide because of superior, precision, and innovative engineering. Germany is one of the top destinations for FDIs in agricultural, construction, and mining machinery in Europe. These factors adequately drive the market in the country.
Key Market Trends
Increasing Farm Mechanization Driving the Market
Germany, the country is known for its engineering expertise is also incorporating its technical ingenuity to develop its agricultural sector. With the massive technological progress in the country, Germany has also developed a very well-trained and skilled workforce to use its state-of-the-art agricultural machinery and enable the utilization of top technology in the crop fields. This can be backed by the fact that the area harvested under the primary crops in the country has seen an increasing trend in the past few years from 8.86 million hectares in 2015 to 8.91 hectares in 2018 and is further estimated to rise in our forecast period by a CAGR of about 2%. According to a report by the United Nations Statistics Division, Germany was one of the top five importers of agricultural machinery from the United States in 2018. German farmers also receive a subsidy from the European Union annually for the investment in their farms. This enables them to invest in modern machinery that is otherwise expensive. The above factors are substantially driving the market for agricultural machinery in the country.
Tractors Dominate the Market
Tractors are the leading segment in agricultural machinery in terms of revenue and quantities sold in Germany in the past five years and the trend is projected to continue in the forecast period. Tractors are further sub-segmented into five segments namely less than 25 HP, 25-50 HP, 51-100HP, 100- 175 HP, and greater than 175 HP. Tractors with high horsepower account for a relatively higher market share when compared to small- and medium-sized tractors owing to their prices and requirements in the fields. Germany was also one of the major exporters of tractors, globally in 2019. AGCO Corporation is one of the leading companies in the tractors market in Germany which sells brands like Massey Ferguson and Valtra Inc.
The market studied is highly consolidated with few major players occupying a major share of the market since crop growers prefer big brands when it comes to machinery for assurance of quality and after-sales services offered by the major companies. New product launches, partnerships, and acquisitions are the major strategies adopted by the leading companies in the market in Germany.
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