Tractor Market in Europe - Industry Outlook and Forecast 2018-2023

INDUSTRY INSIGHTS

The increasing use of advanced machinery in agricultural activities such as plowing the fields to get them ready for crop sowing is one of the major drivers of the European tractor market. The growing demand for agriculture equipment such as rotavators and combines and effective monetary policies will augment the development of the global market. The latest mandate of the Mother Regulation for the manufactures as well as the requirements of the farmers and farm landholders who choose agriculture tractors based on usage and the land area will propel the growth in the European region. The implementation of stringent safety regulations such as TMR, diesel emission norms, and ABS mandatory will encourage the leading vendors to launch innovative, new products in the European region. The key players are capitalizing on the finance schemes and offer to boost sales to clear their inventories in the region. Focus on emission standards as per the research analysts at Arizton, also predicts that the mandate regarding stage v diesel engine and emission norms will surge the sales in the region during the forecast period. The growing demand for farming equipment due to an increase in the total factor productivity in farming, reduction in post-harvest loss, value addition to the agricultural raw materials, and better quality of agricultural products will boost the demand in the region.

The increasing investments towards the development of farming machines for the use of plowing, planting, harrowing, tilling, and disking will result in rising revenues in the European region. The implementation of GPS, telematics, and remote sensors in tractors with the collaboration of large smart tech companies will revolutionize the market over the next few years.

Market Dynamics

The growing focus on automation and reduction of labor costs is encouraging farmers to adopt mechanization and augmenting the growth of the European tractor market. The development of precision farming process will result in easier farm scanning, crop scouting, and farm machinery maintenance in the European region. The trend of increasing minimum wages will force many agricultural communities to strategize on containing the labor cost and focus on automation and development of advanced machinery in the region. The adoption of mechanization by large enterprises is estimated to potentially eliminate the labor job by around 40% by 2025 and can offer cost savings up to about 20%, offering a boost in operating margins by between 10−15%. Countries such as Romania, Latvia, Lithuania, the UK, and Bulgaria are amongst the highest minimum wage paying regions. Such increase in overall cost will propel the demand in the market.

European Tractor Market Segmentation

This research report includes a detailed segmentation by HP type, wheel drive, and countries.

INSIGHTS BY HP TYPE

Turkey records the highest sale of 40-100 HP tractors in the European tractor market during 2017

The < 40HP segment dominated the largest share in 2017, growing at a CAGR of over 4% in thousand units during the forecast period. Turkey contributed to over 1/3rd of the total sales in this power segment followed by Germany and France. Spain and Russia are expected to show promising growth in the region during the forecast period. The 40-100 HP segment recorded the largest sales in Europe, contributing to 40% in unit sales during 2017. Germany, France, Italy, and the UK together contributed to a large portion of the share in this segment. The growing demand for automation and mechanization will attribute to the growth of this segment.

INSIGHTS BY WHEEL DRIVE

Redesigning of 2WD tractors will augment the sales in the European tractor market during the forecast period

The wheel drive segment is classified into 2 WD, and 4 WD. 2 WD segment occupied the largest share in 2017, growing at a CAGR of around 5% in thousand units during the forecast period. Turkey, Germany, France, Italy, and Russia together accounted for more than half market share in this segment during 2017. The leading companies are investing in the redesign of 2WD tractors to attract new consumers and boost their revenues in the region. These machines are designed to have more power and ease of handling features so that farmers can upgrade their equipment and buy new ones as per the usage in the market. The leading vendors are including additional features such as power shuttle for ease of shifting between forward and reverse, providing added efficiency for operating in confined spaces and for handling additional workload will contribute to the development of the market.

INSIGHTS BY COUNTRIES

Turkey’s favorable agricultural environment is contributing to the revenues in the market

Turkey dominated the market share in 2017, growing at a CAGR of approximately 9% in thousand units during the forecast period. Turkey is an agriculturally sufficient country with a favorable climate, large arable lands, and abundant availability of water resources. The establishment of a new subsidy program for agricultural products starting in 2017 is propelling the growth of Turkey in the European region. The increasing production of wheat, barley, corn, rye, oats, triticale, cotton, paddy rice, tea, tobacco, lentils, dry beans, chickpeas, safflower, soybean, sunflower, canola, hazelnuts, olives, and forage crops will propel the growth of this region. Government initiatives to offer subsidies on diesel and other agricultural equipment will attribute to the growth of the European tractor market.

The European tractor market research report includes in-depth coverage of the industry analysis with revenue and forecast insights for the following segments:

HP Type

• < 40 HP
• 40-100 HP
• 100+ HP

Wheel Drive

• 2 WD
• 4 WD

Countries

• UK
• Germany
• France
• Poland
• Netherlands
• Spain
• Russia
• Turkey
• Belgium
• Italy