Compact Tractors Market Outlook
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.
Compact Tractors Market Analysis by Power
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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Compact Tractors Market Analysis by Application
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.
Compact Tractors Market Analysis by Region
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.
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Compact Tractors Manufacturers: Key Imperatives
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. In the same month & year, another market leader Kubota Corporation launched B2401 compact tractors designed for tilling, rotary cutting and pulling carts applications. Other leading players in the global compact tractors market are AGCO Corporation, Mahindra & Mahindra Ltd., CNH Industrial N.V., Tong Yang Moolsan (TYM), Daedong Industrial Co., Ltd., Escorts Limited, Argo Tractors S.p.A., LS Mtron, and Yanmar Co., Ltd.
COVID-19’s Impact on the Global Compact Tractors Market:
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.”
Global Compact Tractors Market: Scope of the Report:
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.
Compact Tractors Market - Scope of the Report
Fact.MR recently published a market study on the global market for compact tractors. The study provides a detailed assessment on the key market dynamics, including drivers, trends, opportunities, restraints, and detailed information about the compact tractors market structure. The market study presents exclusive information about how the compact tractors market will grow during the forecast period of 2020-2030.
Key indicators of market growth, which include Year-on-Year (Y-o-Y) growth of the market, value chain, supply chain analysis, and Compounded Annual Growth Rate (CAGR) are explained in Fact. MR’s study in a comprehensive manner. This information can help readers understand the quantitative growth prospects of the compact tractors market in the forecast period.
The study is relevant for stakeholders in the compact tractors market, including manufacturers, suppliers, distributors, and investors, and can help them in developing appropriate strategies to grow in the market. Stakeholders in the compact tractors market, investors, industry experts, researchers, and journalists, as well as business researchers can leverage the information and data presented in the Fact.MR study.
The study also includes statistics as well as facts related to macro as well as microeconomic factors that are impacting developments in the compact tractors market. It also offers actionable insights based on future trends in the compact tractors market. Furthermore, small businesses and new entrants in the compact tractors market too can make use of the information presented in this study, based on which, they can make appropriate business decisions in order to gain momentum in the market.
Key Segments of 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.
Key Questions Answered in the Fact.MR’s Compact Tractors Market Report
- Which regions will continue to remain the most profitable regional markets for compact tractors market players?
- Which factors will induce a change in the demand for compact tractors during the assessment period?
- How will changing trends impact the compact tractors market?
- How can market players capture the low-hanging opportunities in the compact tractors market in developed regions?
- Which companies are leading the compact tractors market?
- What are the winning strategies of stakeholders in the compact tractors market to upscale their position in this landscape?
Compact Tractors Market: Research Methodology
In Fact.MR’s study, a unique research methodology is utilized to conduct extensive research on the growth of the compact tractors market, and reach conclusions on future growth parameters of the market. This research methodology is a combination of primary and secondary research, which helps analysts ensure the accuracy and reliability of conclusions.
Secondary resources referred to analysts during the preparation of the compact tractors market study include statistics from governmental organizations, trade journals, white papers, and internal and external proprietary databases. Analysts have interviewed senior managers, product portfolio managers, CEOs, VPs, marketing/product managers, and market intelligence managers, who have contributed to the development of this report as a primary resource.
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