Europe Agricultural Tractor Machinery Market by Application and Type - Forecast and Analysis 2024-2028

Europe Agricultural Tractor Machinery Market Forecast 2024-2028

The Europe Agricultural tractor machinery market size is forecast to increase by USD 6.50 billion at a CAGR of 5.25% between 2023 and 2028. The market's growth trajectory is influenced by various factors, including rising demand for food production, greater accessibility to rental options, and government backing for agricultural advancement. However, the sector faces challenges such as a shortage of technically proficient farmers, elevated costs associated with agricultural tractor machinery, and limited financial access for farmers. Our report examines historical data from 2018-2022, besides analyzing the current and forecasted market scenario.

AGCO Corp. provides agricultural tractor machinery branded as Fendt, delivering top-tier productivity for large acreage enterprises. Argo Tractors SpA offers agricultural tractor machinery under the Landini, McCormick, and Valpadana brands.

Market Forecasting and Size

Market  Forecast 2024-2028

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Market Segmentation by Application and Type

Application Segment Analysis: 

The farm segment is estimated to witness significant growth during the forecast period. These machines is essential in modern agriculture, enabling farmers to perform a wide range of tasks more efficiently. The demand for tractors in farming is influenced by several factors, including agricultural practices, farm size, technological advancements, economic conditions, and government policies. Larger farms require more powerful and versatile tractors to cover larger areas and handle heavier workloads.

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The farm segment was the largest and was valued at USD 16.04 billion in 2018. Additionally, the adoption of precision agriculture technologies, such as GPS-guided tractor systems and automated implements, further accelerates the use of these machines by enabling more precise and efficient farming operations. As a result, these machines have become indispensable on modern farms in Europe, playing a pivotal role in driving agricultural innovation, sustainability, and competitiveness in the market. These factors will drive the growth of the farm segment of the market during the forecast period.

Type Segment Analysis: 

Based on the type, the market has been segmented into wheel tractors and crawler tractors. The wheel tractor?segment will account for the largest share of this segment.?  A wheeled tractor is a versatile agricultural vehicle primarily used for towing or pulling heavy loads, plowing fields, and other farming tasks. Tractors come in various sizes and power ratings, depending on the intended use and the type of terrain they will operate on. They typically feature a front-mounted engine, a driver seat, and controls for steering, braking, and operating attachments. Modern tractors often have enclosed cabs with climate control systems for the comfort and safety of the operator. Tractors provide significant advantages over traditional methods, allowing farmers to accomplish tasks more efficiently, save time, and increase yields. This transition toward mechanization drives the demand for wheel tractors, which, in turn, will boost the growth of the wheel tractor segment of the market during the forecast period.

Market Dynamics and Customer Landscape

The market in Europe is experiencing dynamic growth, driven by various factors such as technical advancements, integration of telematics, and increasing mechanization in small farms. However, the industry faces challenges like labor shortages, supply chain disruptions due to semiconductor shortages, and fluctuating steel and aluminum prices. To combat these challenges, OEMs are focusing on technological innovations such as electric and driverless tractors, leveraging machine learning algorithms and big data analytics. Additionally, regulatory scrutiny and environmental concerns regarding ICE tractor engines are shaping the market landscape. Despite challenges, the market is witnessing significant innovation and M&A activities, leading to consolidation among leading players and the emergence of product substitutes like robotic technology in agricultural operations. Our researchers studied the market research and growth data for years, with 2023 as the base year and 2024 as the estimated year, and presented the key drivers, trends, and challenges for the market.

Driver - Increasing demand for food production

The increasing demand for food production is a primary driver behind the growth of the market. With the rising population in Europe, the demand for food is expected to rise significantly during the forecast period. Agricultural tractors serve as indispensable tools in meeting this demand by enabling farmers to efficiently cultivate larger areas of land and boost agricultural productivity. From soil preparation and planting to crop maintenance and harvesting, tractors streamline essential farming tasks, allowing farmers to scale up their operations to meet the growing food requirements. The expansion of agricultural activities into previously uncultivated or underutilized land areas also drives the demand for agricultural tractors.

As urbanization accelerates across Europe, there's a pressing need to revitalize marginal lands and embrace modern agricultural methods to harness their full farming potential. Compact tractors play a pivotal role in this endeavor, empowering farmers to mechanize operations even in challenging terrains like hillsides or remote regions, thereby unlocking new avenues for agricultural productivity. Moreover, the adoption of mechanized farming practices addresses labor shortages, particularly in areas witnessing rural-to-urban migration trends, ensuring consistent food production and supply. Consequently, the escalating demand for food production in Europe is poised to propel the growth of the agricultural tractor machinery market in the region during the forecast period.

Trends - Implementation of AI in agricultural machinery

The implementation of AI in agricultural machinery is propelling the growth of the market through various transformative mechanisms. Firstly, AI-driven technologies are revolutionizing traditional farming practices by enabling precision agriculture. Advanced equipped with AI capabilities can analyze real-time data on soil conditions, weather patterns, and crop health to optimize tasks such as planting, fertilizing, and harvesting. By precisely applying inputs and tailoring operations to specific field conditions, farmers can enhance productivity, reduce waste, and improve overall yields.

Moreover, as the benefits of autonomous technology become increasingly evident, farmers in Europe are increasingly investing in AI-powered machines to streamline operations, reduce dependency on manual labor, and boost overall farm efficiency. This trend is expected to drive further growth in the market as more farmers recognize the value of AI-driven automation in enhancing productivity and profitability. Therefore, the implementation of AI in agricultural machinery will drive the growth of the market during the forecast period.

Challenge - Lack of technically skilled farmers

The lack of technically skilled farmers in Europe presents a significant obstacle to the growth of the market, negatively impacting various aspects of the industry. Firstly, modern machinery is increasingly equipped with advanced technologies and features, such as GPS navigation, precision agriculture capabilities, and digital monitoring systems. However, the effective utilization of these technologies requires a certain level of technical proficiency and understanding, which many farmers in Europe may lack. Without adequate training and education on how to operate and maintain these sophisticated machines, farmers may be hesitant to invest in them, fearing inefficiency or potential breakdowns.

Further, the lack of technical expertise among farmers may hinder the integration of digital solutions and connectivity features in machines. Connected tractor systems, which enable remote monitoring, predictive maintenance, and data-driven decision-making, can enhance operational efficiency and productivity. However, without trained personnel to utilize and leverage these capabilities, the full potential of connected machines remains untapped, limiting its appeal and adoption among farmers. Therefore, the lack of technically skilled farmers in Europe will drive the growth of the market during the forecast period.

Who are the Major Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Caterpillar Inc.- The company offers agricultural tractor machinery such as small dozers, telehandler, skid steer loaders, and compact track loaders under the brand name Cat.

We also have detailed analyses of the market’s competitive landscape and offer information on 20 market companies, including AGCO Corp., Argo Tractors SpA, Carraro SpA, Caterpillar Inc., CLAAS KGaA mBH, CNH Industrial NV, Daedong Corp., Deere and Co., ISEKI and Co. Ltd., J C Bamford Excavators Ltd., Kubota Corp., KUHN SAS, Mahindra and Mahindra Ltd., Pronar Sp. z o.o, SDF SpA, Tractors and Farm Equipment Ltd., Wacker Neuson SE, Weichai Lewo Intelligent Agriculture Technology Co., Ltd., Yanmar Holdings Co. Ltd., and Zetor Tractors as.

Technavio market forecast the an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies companies based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Companies are specially categorized into dominant, leading, strong, tentative, and weak based on their quantitative data analysis.  

Segment Overview

The market analysis and report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.

• Application Outlook
  • Farm
  • Landscape garden
  • Others

• Type Outlook 
  • Wheel tractor
  • Crawler tractor

Market Analyst Overview 

The market in Europe is witnessing significant growth driven by various factors. Technical advancements, including the integration of telematics and the adoption of machine learning algorithms, are reshaping the industry. Additionally, the market is experiencing a surge in demand for compact tractors, especially from small farms, and the introduction of electric and driverless tractors is further propelling market expansion. Amidst supply chain disruptions and regulatory scrutiny, leading players are focusing on M&A activities to strengthen their product offerings and customer base. As the market embraces greener technologies to mitigate environmental damage, the adoption of electric-powered tractors and precision farming technologies is expected to grow, particularly in developed markets like Europe.

The market also is witnessing dynamic growth driven by various factors such as technical developments, increased demand for electric tractors, and advancements in AI applications. OEMs are investing heavily in technological innovations to meet the evolving needs of the agricultural sector. However, challenges like fluctuating steel and aluminum prices and environmental regulations pose hurdles. The market sees significant M&A activity and consolidation, particularly in the segment of autonomous and high-power tractors. As the market progresses, big data and computing power play crucial roles in enhancing efficiency and productivity. With subsidies and after-sales services becoming vital, Europe's agricultural tractor machinery market remains a key player in the global landscape, catering to diverse farm sizes and income levels.

The global agricultural tractors market is undergoing a transformative phase driven by technological developments and fluctuating inventory levels. Semiconductor shortages have impacted production, prompting manufacturers to innovate. Amidst this, M&A activity is rife as companies seek to bolster their electric infrastructure and develop autonomous tractors.

In particular, the 2WD segment is witnessing significant growth, fueled by demand from Asia Pacific markets. Diesel prices remain a concern for the automotive industry, influencing the adoption of electric alternatives. The 40 HP to 100 HP segment is experiencing a surge, appealing to tech-savvy farmers looking for efficient solutions. Semiconductor devices play a crucial role in enhancing tractor functionalities, highlighting the intersection of agriculture and technology. As the market enters a growth stage, the focus on sustainable practices intensifies, driving the evolution of electric infrastructure and autonomous technologies. In this dynamic landscape, collaboration and innovation are key to meeting the evolving needs of farmers and ensuring agricultural productivity in the future.

Europe Agricultural Tractor Machinery Market Scope
Report Coverage	Details
Page number	147
Base year	2023
Historic period	2018-2022
Forecast period	2024-2028
Growth momentum & CAGR	Accelerate at a CAGR of 5.25%
Market growth 2024-2028	USD 6.50 billion
Market structure	Fragmented
YoY growth 2023-2024(%)	4.75
Competitive landscape	Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks
Key companies profiled	AGCO Corp., Argo Tractors SpA, Carraro SpA, Caterpillar Inc., CLAAS KGaA mBH, CNH Industrial NV, Daedong Corp., Deere and Co., ISEKI and Co. Ltd., J C Bamford Excavators Ltd., Kubota Corp., KUHN SAS, Mahindra and Mahindra Ltd., Pronar Sp. z o.o, SDF SpA, Tractors and Farm Equipment Ltd., Wacker Neuson SE, Weichai Lewo Intelligent Agriculture Technology Co., Ltd., Yanmar Holdings Co. Ltd., and Zetor Tractors as
Market dynamics	Parent market growth analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period.
Customization purview	If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2024 and 2028
• Precise estimation of the market growth and trends and its contribution to the market in focus on the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Market growth and forecasting across Europe
• A thorough market analysis and report of the market’s competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market  companies

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