Southeast Asia Tractors Market - Industry Analysis & Forecast 2023-2028

The Southeast Asia agricultural tractor market witnessed registrations of 94,671 units in 2022 and is expected to reach 1,18,182 units by 2028 growing at a CAGR of 3.77% during the forecast period. Southeast Asia has over 685 million food consumers and is the fourth-largest food market in the world. The region witnessed a massive increase in farm mechanization in terms of agricultural and industrial productivity.

The trend of alternative fuel-based tractors in Southeast Asia is expected to drive the demand for tractors during the forecast period. Farmers are more conscious about the environment; hence, they are focusing on green farming practices. Also, farming is expected to flourish with the help of precision farming and telematics in tractors, which bodes well for the agriculture tractor market.

KEY HIGHLIGHTS

• The agriculture tractor market in Southeast Asia increased by 3.1% in 2022 from 2021. The increase in crop production and tractor sales was due to favorable climate conditions and government support to farmers.
• The Southeast Asia agricultural tractors market is highly concentrated, with the top players controlling most of the industry. Domestic and global brands, on the other hand, are equally represented in the market.
• Southeast Asian government plans schemes and initiatives to facilitate credit and improve agriculture-related operations, which will contribute to the growth of the overall value chain of the market.

MARKET TRENDS & OPPURUNTITES

Technological Advances in The Tractor Technology
A new frontier of innovation emerged as agriculture met digital technology, opening various paths to a smart agricultural future. Tractor manufacturers are competitive, and companies constantly strive to innovate and ensure product differentiation at affordable prices. State-of-the-art technology-based tractors are currently available in the market. GPS and remote sensing make farming more accurate and productive.

Increased Farm Mechanization
Using animal and human power in the Southeast Asian agricultural sector is low. Fossil fuel-powered vehicles, such as tractors and diesel engines, are used instead. Hence, the Southeast Asia agricultural tractors industry will likely be driven by increased agricultural equipment or machinery used during the forecast period. The farm holding structure is based on the economic size of a farm, depending on the farm’s output per year. A high number of small farms characterizes the agricultural sector. The farm holding structure is consolidated, and medium-scale farms account for more farming lands in several regions. The high number of medium-scale farms in high agrarian areas will positively affect the industry in Southeast Asian countries. Such farms employ more than one tractor and other related agri-equipment to carry out several agricultural activities. Further, there is an increase in the adoption of compact agricultural equipment as the export demand for fruits and flowers is high in the region. Several major and highest-selling brands, including Kubota and New Holland, offer compact equipment in the Southeast Asia agricultural tractors market.

SEGMENTATION INSIGHTS

INSIGHTS BY HORSEPOWER
The less than 50 HP horsepower segment dominated the Southeast Asia agricultural tractors market in 2022. Factors favoring the sale of tractors in the less than 50 HP range include versatility, the presence of hard soil in Southeast Asian countries, and increased purchasing power of farmers due to better Minimum Support Prices (MSP) and crop realization. In Southeast Asian countries, the government focuses on increasing agricultural production in almost all the regions, which is likely to increase the potential of below 50 HP tractors due to the nature of crop farming and fragmentation of landholding structures.

INSIGHTS BY BY WHEEL-DRIVE
The Southeast Asia agricultural tractors market is dominated by low-range HP 2WD tractors. Among the several tractor models available in the country, 2WD tractors are the most favored by farmers. The low relative cost of ownership, the sufficiency of features and haulage power, and convention make 2WD tractors more popular among farmers. Industry players are trying to redesign their 2WD tractors with more power and ease of handling features so that farmers can upgrade their tractors and buy new ones per their usage. Features such as fuel efficiency, added comfort for operating in confined spaces, and light loading work is expected to be in demand in several agricultural economies.

REGIONAL ANALYSIS

In 2022, Thailand was Southeast Asia's largest producer of agriculture and crop outputs. Moreover, a country with high agriculture and crop outputs remains the major prospect for agricultural tractors. Due to such factors, Thailand held the largest Southeast Asia agricultural tractors market share in 2022. For Thai governments, food self-sufficiency is the key agenda due to the decline in arable land due to urbanization, exploitation of natural resources, and a massive shift in the production and consumption of food patterns across the globe. In 2022, the less than 50 HP tractor segment recorded high growth in Thailand with a CAGR of 4.02%. The country's sales of above 100 HP tractors are expected to remain steady during the forecast period due to the segregation of large and medium-scale farmlands in the coming years.

COMPETITIVE LANDSCAPE

The Southeast Asia agricultural tractors market is highly concentrated, with the top players controlling most of the industry. Domestic and global brands, on the other hand, are equally represented in the industry. John Deere, CNH Industrial, and Kubota dominated the Southeast Asia agricultural tractors market with a collective market share of over 50%. The threat of rivalry is high in the industry since more than 50% of the share belongs to the top three key players. These players are thriving on innovation in the tractor market. They are increasingly investing in developing advanced agricultural tractor technology for precision farming and machine automation.

In terms of advanced tractor technology, John Deere has equipped many models with GPS, location tracking, image sensors, and telematics to assist in field navigation. The company also equipped its S700 model combined with features to autonomously adjust the harvesting equipment according to the state of the crops. Vendors such as ARGO and John Deere directly finance farmers to encourage them to buy tractors and other related agricultural machinery. Further, only a few local manufacturers are present in Indonesia and Thailand, such as Pt Rutan Indonesia, Pt Traktor Nusantara, and Altrak. Still, the farmers prefer to use the product of global players such as John Deere, Kubota, and CNH industrials. Therefore, these companies now focus on new strategies for assembling and producing machinery locally to reduce trade barriers.

WHY SHOULD YOU BUY THIS REPORT?

This report is among the few in the market that offer outlook and opportunity analyses forecast in terms of:

• Market Size & Forecast Volume (Units) 2020–2028
  • Segmentation by Horsepower
  • Segmentation by Wheel Drive
  • Segmentation by Geography
• Production and trade values
• Major current and upcoming projects and investments
• Competitive intelligence about the economic scenario, advantages in Southeast Asia, industry dynamics, and market shares
• Latest and innovative technologies
• COVID-19 impact analysis of the industry
• Company profiles of major and other prominent vendors
• Market shares of major vendors