The availability of significant natural resources and vast expanses of unexploited agricultural land is one of the main factors attributing to the demand in the tractor market in Latin America. The annual food and agricultural exports in 2016 across Brazil, Argentina, Mexico, and Chile accounted for over $100 billion. The favorable government policies and the growing demand for ethanol will drive the tractor sales in the Latin American market. The rising demand for 40-200 HP tractors across the region will create lucrative opportunities for leading manufacturers in the Latin American market. The growing awareness among land-owners about the potential agricultural mechanization will encourage large-scale farmers to adopt technology-driven farming methods in the region. The growing trend of precision agriculture aided with the increasing penetration of the Internet and rise in the number of smartphones is propelling the demand for farm mechanization in the Latin American market. Leading IT and telecommunication provider such as Cisco is investing in the development of the Internet of Things network in Argentina. Such investments will promote easy access to farmers to agricultural solutions and advanced technology that requires internet connectivity to operate thereby, accelerating the growth of the tractor market in Latin America.
The leading vendors are focusing on offering aftermarket services to increase the credibility of the product and increase brand loyalty among consumers to boost their revenues in the Latin American market. The farmers are leveraging smart technologies such as sensor technology, GPS, and climate satellites to understand the impact of climate change on crop production and promote sustainable practices in the region. The tractor market in Latin America is expected to reach volumes of around 87 thousand units by 2023, growing at a CAGR of more than 4% during 2018-2023.
Tractor Market in Latin America - DYNAMICS
The growing focus on using alternate fuel-based machines will propel the growth of the tractor market in Latin America. The leading manufacturers are developing tractors with alternative fuels such as bio-diesel and electric or battery operated machines to attract new consumers and boost sales in the Latin American market. The introduction of products will alternative fuel sources will help vendors gain a larger market share and boost their revenues. The increasing availability of machines that run on liquefied natural gas (LNG), compressed natural gas (CNG), propane, diesel, and kerosene will help in the development of the Latin American market. Bio-diesel tractors initially cost a lot of money but over the period of time require less maintenance thereby, making them more profitable than the traditional ones. The increasing investments in R&D and manufacturing of machines that operate on alternative fuels will revolutionize the tractor market in Latin America.
Tractor Market in Latin America - SEGMENTATION
This market research report includes a detailed segmentation of the market by HP type, by wheel drive, and by countries.
Tractor Market in Latin America – HORSEPOWER TYPE
Agribusinesses to drive the demand for 40-100 HP machines in the tractor market in Latin America during 2023
The tractor market in Latin America by HP type is segmented into 40-100 HP machines in the Latin American market. Brazil, Argentina, and Mexico together contributed to more than 85% of the unit sales in this segment and is expected to increase over the next few years. The growing adoption of farm mechanization and the introduction of precision farming will propel the growth of this segment in the market in Latin America. The development of agribusiness that enables production and commercialization of agricultural commodities will have a positive impact on the tractor market in Latin America. The trend of using modern agricultural techniques and minimal input cost to increase productivity will augment the development of this segment in the Latin American market.
Tractor Market in Latin America – WHEEL DRIVE
Upgrades to boost the use of 2WD machines in the tractor market in Latin America during the forecast period
The wheel drive segment in the tractor market in Latin America is classified into 2 WD and 4 WD. The 2 WD segment controls more than 3/4th of the market share in 2017, growing at a CAGR of more than 4% during the forecast period. The increasing use of 2 WD machines by traditionalist farmers and the cost efficiency of these products is driving the growth of this segment in the Latin American market. The leading vendors are focusing on designing 2 WD models to introduce more power and ease of handling features, so that farmers can upgrade their tractors and buy new ones as per the usage in the Latin American market. The introduction of machines with better fuel efficiency and operational at confined spaces especially in countries such as Brazil and Mexico will help manufacturers gain a larger market share and boost their revenues in the region. The focus on customization as per the requirement of the farmers will contribute to the growth of the tractor market in Latin America. Massey Ferguson and John Deere are largest manufacturers in the 2 WD segment in the regional market.
Tractor Market in Latin America – COUNTRIES
Government subsidies in Brazil will drive the growth in the tractor market in Latin America during the forecast period
The tractor market in Latin America by countries is divided into Brazil, Mexico, and Argentina. Brazil is the largest consumer and occupied most of the market share in 2017, growing at a CAGR of approximately 5% during the forecast period. Brazil is the largest exporter of coffee, soybeans, crop-based ethanol, and a major exporter of cotton, corn, rice, and sugarcane in the world. Brazil is the second largest region after the US in tractor sales across the world market. The availability of government financing subsidies in the country will propel the growth of the Latin American market during the forecast period. The introduction of a new emission standard, called as "Mar 1" will help vendors launch new agricultural machines in the Brazilian market. The growing demand for high HP tractors for better productivity and yield will propel the development of the tractor market in Latin America during the forecast period.
Tractors in Latin America market research report includes in-depth coverage of the industry analysis with revenue and forecast insights for the following segments: