The global agricultural tractors market demand is expected to reach 4,968 thousand units by 2030, expanding at a CAGR of 6.8% during the forecast period, according to a study conducted by Grand View Research, Inc. Increase in farmers’ income, lower bank interest rates, and soaring farm yields are expected to drive the market growth over the forecast period. In addition, increased demand for mini-compact tractors is likely to drive market growth over the forecast period. Also, the integration of sophisticated technology, such as Light Detection and Ranging (LiDAR) and Global Positioning System (GPS), and telematics coupled with the rising popularity of compact tractors are presumed to drive the market growth over the next few years. Increasing demand for medium horsepower (40 to 100 HP) tractors is likely to grow over the next few quarters of 2022.
It is attributed to greater convenience for farmers to operate in compact spaces and provide a better operational experience on different terrain. However, Original Equipment Manufacturers (OEMs) are witnessing supply chain disruptions, which may hamper the market growth. In addition, semiconductor shortages are likely to have production delays. Thus, new agricultural tractor sales are likely to see delayed delivery schedule, thereby hindering the market growth. The international commodity prices of base metals directly influence this market. A rise in raw materials costs of steel, aluminum, and others is likely to increase the price of agricultural tractors, which will eventually impact the market demand. The trend is expected to continue till Q4/2022. As a result, OEMs are expected to increase product prices by 22% in 2022. Such challenges may hinder the demand over the forecast period.
Agricultural Tractors Market Growth & Trends
- The surge in demand for 2WD tractors and the rising popularity of autonomous tractors are likely to drive the market over the forecast period
- China, India, and countries of Eastern Europe are likely to have strong demand for less than 40 HP engine tractors over the forecast period
- This is due to lower credit interest rates and policies undertaken by the respective government to protect farmers’ income
- The 2WD and 4WD segments are expected to register 7% and 4% growth rates in 2022 and 6% and 3% in 2023 respectively
- The slowdown is attributed to worldwide tractor microchip shortages, which cause supply chain delays leading to low inventory stocks of equipment and parts
- Key vendors in the market continue to witness labor shortages, leading to production delays. However, OEMs advancement in electric tractors with autonomous features is expected to be a new revenue stream to increase their market profitability over the next few years
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