The Europe farm tractor market is at the forefront of the bloc’s export. The bloc accounts for almost 54% of the world’s imports and 64% of the world’s export of agricultural machinery. The sector employs almost 170k people and includes 7k industrial firms contributing nearly $47 Billion annually
EUROPE FRAM TRACTOR MARKET BY ENGINE CAPACITY
One of the most important reason is rising farm labor costs owing to shortage of migrant workers. According to the German Association of Agricultural Employers (GLFA), there is a steep decline in the number of seasonal immigrants labour during the peak harvest period in Germany.
A shortage of farm labor is giving way to rise in wage rates which is expediting the process of adoption of tractors. A reason for the labor shortage can be attributed to rapid urbanization, which is promoting migration to cities.
The same rapid urbanization is also boosting the agricultural sector, which in turn is boosting the tractor market. According to some publications, the global urban population has grown by 1.98% between 2016 and 2017, resulting in increased demand for food.
Another important factor can be the technological advancements that are revolutionizing the farming and agricultural processes such as precision farming or autonomous tractors. Replacement of existing machinery with advanced machines is expected to fuel the growth.
The autonomous tractors which is currently discussed as a concept in the board meetings are expected to significantly increase productivity and efficiency while driving down the costs of labor.
Apart from these factors, the Tractor Mother Regulation which came into effect from 1st January 2018 significantly fuelled the rapid advancement and innovation in the European Farm Tractor market. The regulation mandates stringent safety norms for farm tractors such as TMR, diesel emission norms and ABS.
The forecasted growth can be hindered due to the high taxes and import tariffs imposed by different countries on agricultural equipment. For example, the Republic of Turkey imposed a 21% duty on agricultural machineries imported from non-EU countries in 2017.
Another unaccounted huge business disruption occurred due to the prolonged COVID-19 pandemic which will severely deter the forecasted growth. The fact is evident from Mahindra & Mahindra’s (one of the largest players in the European tractor market) April 2020 sales figure, which showed a decline of almost 95% as compared to the month’s sales figure of the previous year (exported 56 tractors in April,2020 against 1057 in the same month in 2019).
One of the important reason for the development of the agricultural sector in European Union was due to the protection that the sector enjoyed on account of the Europe’s trade bloc since the 1960s. But those protections are gradually getting reduced due to factors such as declining rural population, the sector’s smaller contribution to the European Union’s economy and reforms to the common agricultural policy. There has been a constant push to include agriculture in Free Trade Agreements which will make the sector more competitive due to cheaper imports.
But with advanced and innovative agricultural machineries including tractors, this threat can be converted into an opportunity. This is what the European Agricultural Machinery Association (CEMA) is trying to attain through AgriTech 2030. It focusses on 3 key areas as listed below –
The industry including OEMs, distribution centres, etc. should adapt to new strategy in order to emerge out successfully in the new normal –
2. Rental Business – Due to the disruption in cash flows caused by COVID-19, it will be a bit difficult for the farmers to afford a tractor for the next few years.
According to a statement from Kubota Corporation, the company will be the first Japanese producer to offer electric tractors in Europe. A small number of Kubota’s LXe-261 compact electric tractors are available in Europe, where the region is actively working to become carbon neutral.
Local governments in Europe will have access to a long-term rental programme for the LXe-261. Being able to operate an electric tractor for extended periods of time has been a major challenge. A large-capacity battery that can deliver a quick one-hour charge and an average of 3–4 hours of continuous use is included with the LXe-261.
In response to the usage requirements of local customers identified through the LXe-261 tractor trails, rapid charging during lunch is provided for afternoon use after the batteries have been depleted during the morning shift.
In a virtual launch event, New Holland Agriculture presented its new flagship T7 Heavy Duty (HD) tractor to the European press. The event, titled “Intelligent farming all ways,” highlighted the brand’s commitment to making the benefits of intelligent farming technologies widely available to farmers as well as its vision of agriculture 4.0.
The brand-new Horizon Ultra cab and cutting-edge PLM Intelligence features of the new T7 HD provide a superior working experience while maintaining the tractor’s powerful performance, exceptional agility, and outstanding versatility.
It is perfect for contractors looking for a boost to their comfort, efficiency, and productivity while juggling multiple field and transportation applications.
FT 6080 Pro and FT 6090 Pro Farmtrac tractors in the 80 and 90 HP categories will debut simultaneously in Italy and Mexico at EIMA, the International Exposition of Machinery for Agriculture and Gardening, Bologna, and at Expo Agroalimentaria Guanajuato, Irapuato, respectively.
Farmtrac, one of the world’s top tractor manufacturers, is based in Poland. These new FT 6080 Pro and FT 6090 Pro tractors are technological marvels with excellent value for farmers all over the world. They are in line with Farmtrac’s pedigree of traditional, straightforward, and effective farm machines.
The European Tractor market consists of some of the dominant players such as Deere & Company, CNH Industrial, Kubota, etc. which have higher share in the market. The leading vendors focus on aftersales service for increasing brand loyalty and driving growth.
Other prominent players in the European market are Argo Tractors, Carraro, Lovol Arbos Group.
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