Increasing Demand for Advanced Farming Equipment to Boost Uptake of Farm Tractors in North America and Europe
The rapidly growing population and a subsequently increasing demand for food are prompting farmers in the North America and Europe regions to equip themselves with the latest and fully mechanized farming machines. As a result, the demand for farm tractors in these regions is rising at a brisk pace. Transparency Market Research (TMR) finds that rapid technological advancements and the presence of favorable government policies are likely to provide a fillip to the North America and Europe farm tractor market. Easy access to credits provided by governments is also encouraging the adoption of farm tractors.
According to a report by TMR, the market is anticipated to register a sales volume of 582.2 thousand units by the end of 2024. While the revenue of the Europe farm tractors market is estimated to expand at a CAGR of 5.4% between 2016 and 2024, North America is likely to exhibit a steady 3.0% CAGR during the same period.
What are the strategies adopted by key players to stay relevant in the North America and Europe farm tractor market?
The leading players in the market are focusing on staying relevant in the market through extensive research and development activities. Companies are seeking a competitive edge by offering quality products. To put this in perspective, Deere and Company is working towards popularizing the notion of autonomous precision agriculture. The latest figures suggest that in North America, nearly one-third of the crop acreage was being farmed using self-guidance systems. Other leading companies in the market are AGCO Corporation, Argo Tractors S.P.A., Class KGaAmbH, CNH Industrial N.V., Daedong USA Inc., Kubota Corporation, Mahindra USA Inc., and SDF Group.
Why are manufacturers in the farm tractor market shifting focus from North America to Europe?
In terms of volume, North America dominated the market in 2015. The region is primarily driven by the flourishing growth of the U.S. farm tractor market, which experienced a significant boost in the demand for compact and small tractors in the below 40 HP category. However, due to the frequent fluctuation and weakening of the Canadian dollar, the market in Canada is likely to witness a steep decline in shipments. Furthermore, the majority of key manufacturers are experiencing a tough time in strengthening their market presence in Canada as a large part of the local demand is fulfilled through imports, which aggravates the chances of currency fluctuation.
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On the other hand, the presence of relatively large farms in terms of area in European countries such as Finland, the Netherlands, and the U.K. is fuelling the growth of the Europe farm tractor market. In 2015, the region recorded a shipment of over 153 thousand units. Other countries such as Italy, Germany, and France are expected to rise at a healthy pace over the forecast period owing to increasing demand for farm tractors above 80 HP.