Analysis of Compact Tractors market covering 30 + countries including analysis of US, Canada, UK, Germany, France, Nordics, GCC countries, Japan, Korea and many more
The global compact tractors market is anticipated to grow at a sluggish CAGR of 3.3%, with an absolute $ opportunity of more than US$ 4.2 billion during the forecast period (2020 - 2030). Mechanization of the global agricultural sector is projected to burgeon the high uptake of compact tractors.
However, the market is unravelling with the pandemic hampering supply chains, compelling tractors’ manufacturing companies to either halt production or operate in reduced capacity. For instance, In April 2020, one of the leading compact tractors manufacturing company Kubota Corporation suspended all operations at its Georgia, US plant. This has annihilated demand for compact tractors in the first two quarters of 2020.
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Compact tractors with 31HP-40HP engines accounted for a majority of the market share in the global compact tractors market on back of its prolific advantages. However, in the first quarter of 2020, the demand for compact tractors has witnessed a major downturn due to high volatility in the global market amid the COVID-19 pandemic. Imposition of lockdowns in many regions has restricted mobility and led to a closure of retail avenues. This has caused latency in the market, dramatically lowering sales.
According to the Association of Equipment Manufacturers (AEM), in February 2020, the sales of compact tractors below 40HP was down by 9.7% in the US while in Canada it dipped by 20.2% as compared to the previous year. Negligible demand is expected to hinder the growth of the compact tractors market in the next three fiscal quarters. Despite these trends, compact tractors of 31HP-40HP engines are projected to create an absolute dollar opportunity of US$ 1,595.0 Mn during the forecast period as market rebounds post pandemic.
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The agriculture segment is expected to grow 3.4% during the forecast period. Agriculture is one of the major applications of compact tractors, holding more than 30% of the market share during the forecast period.
Small-scale framers are increasingly adopting compact tractors as they are lightweight and allow crops to be handled carefully, reducing damage. Moreover, compact tractors are equipped with small farm implements such as front-end loaders and back-hoes, enabling farmers to complete various tasks on fields.
The outbreak of the coronavirus pandemic has compelled most of the governments to enforce lockdowns leading to stalled production and operations of manufacturing plants and a subsequent dip in inventory. Further, the shortage of raw materials hinders the absorption of compact tractors in agriculture.
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South Asia & Oceania accounted for around 33% share of the global compact tractors market during the historical period. Agriculture has been one of the major occupations in the region due to which demand for compact tractors has always been high. In addition, farm mechanization has generated substantial opportunities for compact tractors manufacturers.
The need for high agricultural productivity and increasing labor costs is boosting the adoption of compact tractors for small framers in the region. However, compact agricultural tractors are seeing a visible shift in market dynamics due to the COVID-19 crisis. There were notable drops in sales for tractors along with slowdown in production on back of precautionary measures adopted by the manufacturers. This has hindered the demand for compact tractors in South Asia and Oceania.
The compact tractors market is highly consolidated and competitive in nature. Leading players are focusing on new product developments to stimulate growth. For instance, in February 2020, leading compact tractors manufacturing company Deere & Company launched a heavy-duty compact utility tractors 4M which is available in 52 HP & 66 HP.
The unprecedented effects of the novel coronavirus on trade and commerce are intensifying with the extension of lockdowns in most countries. The pandemic has presented critical challenges to the compact tractors industry players, such as insufficient raw material supply, shortage of work force, hampered supply chains etc.
Manufacturers have had to suspend operations which has led to serious financial shortfalls to companies. For instance, in April 2020, CNH Industrial N.V. suspended all operations at its plant in Grand Island, US. At the same time, in February 2020 Deere & Company announced that it will spend around US$ 40 Mn to support its hampered supply chain in China. Such aggressive developments in the market are projected to create latency in the market for the next few fiscal quarters.
“The global compact tractors market will witness sluggish growth in the next couple of years due to economic volatility created amid COVID-19 pandemic. However, in the second half of the forecast period, the market will rebound and create significant opportunities.”
The recent global compact tractors market report by Fact.MR offers a 10-year forecast from 2020 to 2030. The report elaborates on the key drivers, restraints, opportunities and threats to the expansion of the global compact tractors market. A detailed segmental analysis, based on power, transmission, application and regions, has been provided in the report.
Regional analysis in terms of supply chain analysis, business execution and market value analysis provides an in-depth perspective about the future scope of the global compact tractors market. In addition, a separate section on market structure has also been provided. The section provides a detailed analysis of key market players and the strategies for expansion in the compact tractors market.
Fact.MR’s study on the compact tractors market offers information divided into two key segments - power, transmission and application across six regions. This report offers comprehensive data and information about important market dynamics and growth parameters associated with these categories.
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