Agricultural Tractors Market Demand is driven by Increase in Farmers’ Income and Lower Bank Interest Rates

Agricultural Tractors Industry Overview

The global agricultural tractors market demand was valued at 2,765.3 thousand units in 2021 and is anticipated to expand at a compound annual growth rate (CAGR) of 6.8% from 2022 to 2030. The surge in demand for compact tractors on small farms and technological advancements, such as integrating telematics with agricultural tractors, are expected to drive market growth over the forecast period. In addition, the rapid adoption of mechanization in the agriculture industry is likely to bode well for the market growth over the next eight years. Furthermore, farm laborers’ migration toward cities creating a shortage of laborers is anticipated to drive the market growth. The outbreak of COVID-19 hampered the product demand owing to the temporary suspension of production and supply chain disruption.

However, in H1 2021, the demand for tractors bounced back significantly with double-digit growth in major economies, such as the U.S., Canada, the U.K., Germany, China, and India. Also, strong crop production in these markets, along with the need to replace aging equipment, increased product sales in H1 2021. However, a sudden increase in demand led to lower inventory levels of tractors in H2 2021, a trend expected to continue over the next few quarters of 2022. In 2022, OEMs are presumed to increase the agricultural tractors prices from 4% to 22%, which is anticipated to further slow down the market growth. It is attributed to low inventory levels of tractors experienced by dealers.

Gather more insights about the market drivers, restraints, and growth of the Global Agricultural Tractors Market

Also, OEMs are currently experiencing a shortage of semiconductors coupled with supply chain disruptions and market uncertainty due to the growing COVID-19 cases, which may delay production. Furthermore, a hike in steel and aluminum prices is expected to increase tractors prices, which is further anticipated to hinder market growth over the next few quarters. Favorable government policies are likely to boost market growth over the forecast period. For instance, on September 15, 2021, the U.S. Department of Agriculture (USDA) introduced a Precision Agriculture Loan (PAL) Act to allow farmers and ranchers to avail of loans to purchase precision agriculture equipment.

Similarly, the imposition of The U.K. Agriculture Act 2020 and the Canadian Agricultural Loans Act (CALA) are likely to favor the product demand over the forecast period. Such initiatives are expected to fuel the market growth over the forecast period. Technological advancements in agricultural tractors are also expected to bode well for the market growth over the forecast period. For instance, the rising popularity of autonomous and electric tractors is projected to increase productivity and efficiency in farming.

Key vendors in this space, such as Deere & Company, CLAAS KGaAmbH Escorts Ltd., SOLECTRAC, and Monarch, have commercially launched concepts for their autonomous and electric tractors. For example, in December 2020, MONARCH TRACTOR announced the launch of its electric tractor integrated with autonomous, machine learning, and data analysis features. The launched tractor envisages farmers improving operational efficiency, enhancing labor productivity and safety, and increasing yields.

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Agricultural Tractors Market Segmentation

Grand View Research has segmented the global agricultural tractors market based on engine power, driveline type, and region:

Agricultural Tractors Engine Power Outlook (Volume, Thousand Units, 2018 - 2030)

• Less than 40 HP
• 41 to 100 HP
• More than 100 HP

Agricultural Tractors Driveline Type Outlook (Volume, Thousand Units, 2018 - 2030)

• 2WD
• 4WD

Agricultural Tractors Regional Outlook (Volume, Thousand Units, 2018 - 2030)

• North America
• Europe
• Asia Pacific
• Latin America
• MEA

Market Share Insights:

November 2021: CNH Industrial N.V. signed a long-term agreement with Monarch Tractor, an AgTech company, to develop fully electrified autonomous tractors. The initiative would enable the former company to increase its product portfolio.

August 2021: Deere and Company acquired Bear Flag Robotics, an AgTech company, for USD 250 million. It would help the former company to meet the consumer demands and increase its customer base.

Key Companies profiled:

Some prominent players in the global Agricultural Tractors market include

• AGCO Corp.
• CLAAS KGaAmbH
• CNH Industrial N.V.
• Deere & Company
• Escorts Limited
• International Tractors Ltd.
• Kubota Corp.
• Mahindra & Mahindra Ltd.
• Tractors and Farm Equipment Ltd.
• Yanmar Co., Ltd.

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