Southeast Asia Tractor Market Research Report 2025-2030

SOUTHEAST ASIA TRACTORS MARKET SIZE

The Southeast Asia tractors market witnessed shipments of 101.3 thousand units in 2024 and is expected to reach 119.5 thousand units by 2030, growing at a CAGR of 2.79% during the forecast period. The market has witnessed substantial growth over the past decade, driven by their performance and productivity, indicating that they are unlikely to be completely replaced. Also, introducing smart technologies in the tractor market is revolutionizing agricultural and industrial operations across Southeast Asia. Advanced features such as GPS-guided automation, telematics, IoT-based monitoring, and AI-driven analytics enhance efficiency, reduce operational costs, and optimize productivity. Furthermore, the Southeast Asia tractors market plays a crucial role in supporting the region’s agricultural and infrastructure sectors, driven by increasing mechanization, government initiatives, and the rising demand for efficient farming equipment.

SOUTHEAST ASIA TRACTORS MARKET TRENDS & DRIVERS

Electric and Alternative Fuel Tractors

The need to have a greener alternative to traditional diesel-powered tractors has given rise to the manufacturing of tractors based on alternative fuels like CNG, Hybrid fuel, and electricity. The use of these tractors will ensure a greener environment, less operational costs, and increased productivity. For instance, in September 2024, Mahinder launched a CBG (Compressed Bio-Gas) powered Yuvo Tech+ tractor, promoting sustainable farming with reduced pollutants and carbon emissions. The tractor delivers diesel-equivalent performance while using biogas, reducing fossil fuel dependence. The company continues its commitment to eco-friendly innovations, having introduced CNG, LPG, and dual-fuel tractor technologies.

Increased Farm Mechanization

Farm mechanization in the Southeast Asia region has been growing rapidly in recent years, driven by the need to increase agricultural productivity, reduce labor dependency, and enhance food security. Countries such as Thailand, Vietnam, Malaysia, and others are experiencing a shift towards modernized farming practices due to rising population demands and economic growth. The major driver of increased mechanization is labor shortages in rural areas. Migration to urban centers has led to a decline in the agricultural workforce, prompting farmers to adopt mechanized solutions to compensate for the lack of human labor. For instance, In November 2024, Malaysia is investing USD 2.69 million in modernizing its onion supply chain to reduce import reliance and boost self-sufficiency to 30% by 2030. The plan includes infrastructure upgrades, technical training, and precision farming to enhance productivity. By 2030, 1,347 hectares will be developed, producing over 14,000 tonnes of onions. This investment will drive demand for tractors and mechanized farming equipment.

INDUSTRY RESTRAINTS

Fluctuations in Raw Material Pricing

The Southeast Asia tractors market is highly sensitive to fluctuations in raw material prices, as these directly impact manufacturing costs, profit margins, and final consumer prices. Steel and aluminum are the primary raw materials used in tractor manufacturing, accounting for a substantial portion of production costs. Southeast Asia heavily depends on imports from China, India, and Japan for these materials, making local manufacturers vulnerable to international market fluctuations. For instance, Steel demand in Southeast Asia is projected to grow by 3.7% y/y in 2024, reaching 76.5 million tons, despite global economic challenges. The region faces supply chain risks, currency volatility, and overcapacity amid the global decarbonization push. Increased steel prices may raise manufacturing costs for tractors and agricultural machinery, potentially leading to higher market prices.

SEGMENTATION INSIGHTS

INSIGHTS BY HORSEPOWER

The Southeast Asia tractors market by horsepower is segmented into less than 50 HP, 50−100 HP, and above 100 HP. ​In the market, the less than 50 horsepower (HP) segment held the largest share in 2024. This dominance is attributed to factors such as the versatility of these tractors, the prevalence of hard soil conditions in the region, increased purchasing power among farmers, and improved crop yields. Governments in Southeast Asian countries are focusing on boosting agricultural production, which further enhances the demand for tractors under 50 HP, especially given the nature of crop farming and fragmented landholding structures in the region. Additionally, the adoption of compact agricultural equipment is on the rise, driven by high export demand for fruits and flowers. Leading brands like Kubota and New Holland are catering to this demand by offering compact equipment suitable for these operations.

INSIGHTS BY DRIVE TYPE

In the Southeast Asia tractors market, 2-wheel drive (2WD) tractors hold the highest market share in 2024 and are also the fastest-growing segment, driven by their affordability, ease of operation, and suitability for small to medium-sized farms. These tractors are particularly popular in countries like Vietnam and the Philippines, where smallholder farmers dominate the agricultural landscape. The CAGR of the 2WD segment is the highest among all drive types, as increasing mechanization and government initiatives supporting farm modernization continue to boost demand. Meanwhile, 4-wheel drive (4WD) tractors are also experiencing steady growth, particularly in large-scale commercial farming and plantation sectors, where higher power and traction are required. However, the high cost and maintenance of 4WD tractors limit their adoption compared to the more versatile and cost-effective 2WD models.

GEOGRAPHICAL ANALYSIS

Thailand, one of the largest agricultural economies in the region, is witnessing a surge in tractor demand due to extensive rice and sugarcane cultivation and holds the largest share of the Southeast Asia tractors market. Malaysia follows as the second-largest market in the region, benefiting from a highly industrialized agricultural sector, particularly in palm oil and rubber plantations, which require advanced farming equipment for land preparation and harvesting. Government support, such as financial aid and incentives for farmers to adopt modern machinery, further accelerates tractor sales in the country.

Vietnam's tractor market is expanding as farmers shift from traditional methods to modern mechanized farming, encouraged by government subsidies and policies aimed at improving agricultural productivity. Myanmar has a growing but relatively underdeveloped level of mechanization. The government's focus on improving agricultural efficiency, along with the increasing adoption of second-hand and small to mid-sized tractors, is contributing to industry expansion. Major global and regional players are actively expanding their presence through joint ventures, dealer network expansion, and localized manufacturing to cater to the diverse needs of Southeast Asian farmers. With continuous advancements in technology and supportive government policies, the Southeast Asia tractors market is poised for significant growth in the coming years.

SOUTHEAST ASIA TRACTORS VENDOR ANALYSIS

The Southeast Asia tractors market is consolidated and shaped by a mix of global agricultural machinery manufacturers and regional players that cater to the unique farming conditions of each country. Major international companies such as John Deere, Kubota, and CNH Industrial (which owns New Holland and Case IH) dominate the Southeast Asia tractors market due to their strong brand reputation, wide product portfolios, and extensive dealer networks. These companies leverage their expertise in advanced tractor technologies, fuel-efficient engines, and precision farming solutions to gain a competitive edge.

John Deere, CNH Industrial, and Kubota dominated the Southeast Asia tractors market with a collective market share of over 50%. The agricultural tractor market in Southeast Asia has the presence of established players in various segments. Vendors are improving their after-sales services, which is making customers loyal to existing brands.

Southeast Asia Tractors Market Developments & News

1. In February 2025, AGCO and SDF partnered to produce up to 85-horsepower Massey Ferguson tractors, enhancing the brand’s global low-mid horsepower segment. The agreement aims to boost market share, ensure high-quality production, and better serve farmers worldwide.
2. In 2024, Kubota Philippines launched L3228 and L4028 tractors, built for durability, innovation, and ease of use. Key features include LED headlights, an improved suspension seat, an air cleaner with an indicator, and more. Through this, the company gains a competitive advantage and increases its share in the Southeast Asia tractors market.
3. In 2023, CNH acquired Augmenta Holding SAS ("Augmenta"), a machine vision company that automates and optimizes farming operations using real-time, multi-spectral sensors and agronomic insights. The company gains a competitive edge in the market.