AGRICULTURAL MACHINERY MARKET THRIVING IN 2021 “From a global perspective, the Covid-19 pandemic had a dramatic effect on the commercial vehicle market as vehicle manufacturers and their suppliers cut back or shut down production as the virus hit and lockdowns were enforced across the world. Despite the Covid-19 impact, agricultural machinery is one market that saw strong performance in 2020 and it is expected to continue this trend for the rest of 2021, as food production and agriculture are treated as essentials. In this insight, an overview of the global agricultural machinery market is given for the 2020/2021 period, by highlighting the top 10 agricultural vehicle markets around the globe, the leading tractor markets, and some key regional markets of the tractor market.” By Maria Georgiou
The global agricultural machinery market: A post-pandemic prediction While Covid-19 forced almost all agricultural machinery manufacturers to reduce their production, or temporarily close down their businesses and implement strict work practices to limit infection from the virus—the actual demand for machinery was relatively strong in 2020. This was mainly because food production and agriculture were treated as essential, so farmers had to continue activities as normal. Favorable government policies, good weather conditions and strong crop production in some countries, coupled with the growing mechanization of agriculture and the need to replace ageing equipment, meant global machinery sales grew in many markets in 2020. With more than 2.2 million units sold globally in 2020, the agricultural machinery market can be described as a Covid-19 survivor. This is around 5 percent higher than 2019, with the majority of this market growth coming from the APAC region, which accounted for 71.3 percent of the market in shipment terms, followed by North America (15.5 percent), EMEA (10.7 percent) and South America (2.6 percent). By taking into consideration monthly registrations for tractors and combines on a global basis for the first half of 2021, Interact Analysis forecasts that 2021 will continue to be a strong year for agricultural equipment sales. Attractive low-interest rates, strong crop production, and high crop prices mean it can be concluded that the good performance for agricultural equipment will continue for the second half of 2021. In addition, the longer58
term forecast is expected to be positive as the rate of mechanization increases in China, India, and some other developing markets.
Top 10 agricultural tractor markets in 2019 and 2020 As global economies continue to reel from the effect of the Covid-19 pandemic, high demand for agricultural products, and increasing farm mechanization rates in developing countries, are driving the growth in the industry. The Asia-Pacific region is growing rapidly due to the increase in mechanization in countries, particularly in India and China, followed by Europe and North America. Additionally, government policies, good weather conditions, and low-interest rates are primarily driving the tractor market. As it can be seen in Table 1, the agricultural machinery market saw strong performance in 2020 for its biggest markets, despite the Covid-19 impact.
India: the leading market for the last five consecutive years, but Covid-19 a threat India and China lead in the number of tractors sold by some significant margin. In detail, India is the world`s biggest tractor market with over 800,000 units sold in 2020, a position which it has continuously held for the last 5 years. But, is the Indian market under threat because of the recent new outbreak of Covid-19? The Indian market remained unscathed up to April 2021 as the COVID pandemic raged within the country. Rural markets are leading the rebound, even as many urban and semi-urban centers remain under partial lockdown. TPI Turf News September/October 2021
