Farm Tractor Market in India 2024-2030

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    FARM TRACTOR MARKET IN INDIA

     

    KEY FINDINGS

    • Despite the global pandemic and nationwide lockdown, the sales momentum of the Indian tractor industry was not affected. The industry has reported aggregate volume growth of 22% YOY in FY 2021.
    • FY2022 could be challenging to sustain this strong growth trajectory. And, any potential risks such as an inadequate monsoon in the coming year may limit the growth print to a lower volume.
    • Govt of India offers subsidies for new tractors to promote the mechanization component of the Macro-management scheme of agriculture which attracts farmers to buy new tractors equipped with new technologies
    • During the past four decades, the tractor industry grew at a compounded annual growth rate (CAGR) of 10%.
    • In February 2021, the first CNG-powered tractor was launched which has direct savings of 55% in fuel cost annually. Within the next two years, the government is likely to promote Bio-CNG, ethanol and electric tractors which would help reduce operating costs for farmers
    • As India stands second worldwide for farm outputs. The share of agriculture in India’s GDP has reached 19.9% for the first time in the last 17 years, making it the sole bright spot in GDP contribution and employing 41.49% of the workforce in 2020
    • All-time high price of Diesel in the country remains a major threat to the market. With global crude prices firming up further on increased economic activity, Diesel prices are unlikely to come down soon in the country

    INTRODUCTION TO FARM TRACTOR MARKET IN INDIA

    India stands second worldwide for Farm outputs. The share of agriculture in India’s GDP has reached 19.9% for the first time in the last 17 years, making it the sole bright spot in GDP contribution and employing 41.49% of the workforce in 2020.

     

    Agriculture was largely insulated from the lockdown in India as timely and proactive exemptions from COVID-induced lockdowns to the sector facilitated uninterrupted harvesting of crops. However, supply chain disruptions impacted the flow of agricultural goods.

     

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    FARM MECHANIZATION IN INDIA

     Mechanization of agriculture enhances productivity, besides reducing human drudgery and the cost of cultivation. Mechanization also helps in improving the utilization efficiency of other inputs like the safety and comfort of the agricultural worker.

     

    Total farm mechanization in India has been lower at 40-45% compared to other countries such as the USA (95%), Brazil (75%) and China (57%). The government has decided to enhance farm power availability from 2.02 kW/ha (2016-17) to 4.0 kW/ha by the end of 2030 to cope with increasing demand for food grains.

     

    The farm mechanization market in India has been growing at a CAGR of 7.53 per cent during 2016-2020 due to thrust given by various government policies

     

    THE RISE OF THE TRACTOR MARKET IN INDIA

    Long back then in 1961, the annual production of tractors was 880 units per year and major manufacturers were Eicher, Gujrat tractors, TAFE, Escorts and M&M. Credit facilities for farmers continued to improve and the tractor market expanded rapidly with the total use passing the half million mark by 1980 to about 700000 units per year in 2020. Today about 20% of world tractor production is carried out in India.

     

    India’s growth is unmatched even with the country’s long history of tractor manufacturing and various policies adopted by the government to enable it to effectively meet the demand.

     

    95% of tractor sales are on credit. Credit is extended by Commercial banks, state land development banks and regional rural banks.

     

    POWERTRAIN TRENDS IN THE FARM TRACTOR MARKET IN INDIA

    Most companies use Constant Mesh transmission and prefer center Shift, these types of tractors have about 60% market share, For quieter operation, more durability and less maintenance. Over the past two years, manufacturers have been less involved in the innovation of powertrains and more concentrated on improving product portfolios like live monitoring and Diagnostics tools in instrument clusters.

     

    Mahindra & Mahindra Ltd and Mitsubishi of Japan to develop four new platforms for tractors ranging from 13HP to 70HP.

     

    Tractors and Farm Equipment Limited (TAFE), and IIT-Kanpur, India will together be developing technology for tractor engines that can run on Dimethyl Ether (DME), rather than fuels like diesel and petrol. DME is clean burning and non-toxic, and is potentially renewable fuel.

     

    The minimum lifting capacity of PTO pumps in India varies from 750Kgf to 3650Kgf because this feature is very important in India as tractors are used for non-agricultural purposes also.

     

    TAFE and New Holland procure their tractor engines from Simpsons and Fiat Powertrain Technologies (FPT). Mini & Compact tractors with their power ranging from 15Hp to 50Hp have a market share of almost 90% in India.

     

    TOP 10 TRACTORS IN FARM TRACTOR MARKET IN INDIA – 2020

    Here is a list of the top 10 tractors in India in 2020:

    • Mahindra 475 DI (4-cylinders, 42 HP, 2830 cc, ₹45-5.80 lakhs)
    • Farmtrac 60 (3-cylinders, 50 HP, 3147 HP, ₹6.30-6.80 lakhs)
    • John Deere 5310 (3-cylinders, 55 HP, 2900 cc, ₹7.89-8.50 lakhs)
    • Sonalika 745 DI III Sikander (3-cylinders, 50 HP, 3065 cc, ₹5.75-6.20 Lakhs)
    • Massey Ferguson 1035 DI (3-cylinders, 36 HP, 2400 cc, ₹5.25-5.60 Lakhs)
    • New Holland 3630 TX Plus (3-cylinders, 55 HP, 2991 cc, ₹5.70-6.35 Lakhs)
    • Powertrac Euro 50 (3-cylinders, 50 HP, 2700 cc, ₹6.6-7.25 Lakhs)
    • Swaraj 735 FE 50 (3-cylinders, 39 HP, 2400 cc, ₹5.5-5.85 Lakhs)
    • Eicher 380 DI (3-cylinders, 40 HP, 2500 cc, ₹5.30 Lakhs)
    • Kubota MU5501 (4-cylinders, 55 HP, 2400 cc, ₹8.86 Lakhs)

     

    FARM TRACTOR MARKET IN INDIA’S MARKET DYNAMICS

    Indian tractor market is the second biggest market worldwide which accounts to one-third of the global production. China and the United States of America are the other major tractor markets in the world. The market share of less than 20 HP tractors doubled in recent years and the segment has seen much technological advancement.

     

    Sales within India closed at 802,670 units in 2020, 11 % higher than 2019 volumes and 1 % more than the previous all-time record, set in 2018 during a pandemic year.

     

    Mahindra & Mahindra- the market leader recorded an average sales growth of >15% post-lockdown every month and their total market share declined 2% in 2020 compared to 2019.

     

    TAFE had an 18% market share and a rise of 15.6% in sales. But, the top 3 market leaders- Mahindra & Mahindra, TAFE and Sonalika have a combined market share of over 72%.

     

    Even during this economic slowdown, the stand-out performer in the Indian tractor Industry was Japan-based Tractor manufacturer- ‘Kubota’ which grew its sales by 18% and a market share of 0.44%.

     

    Based on the last 5 Financial Years, Mahindra & Mahindra holds the top position in its market shares at around 39%. Sonalika has a market share of 15% and had a growth of 40.5% in 2020 compared to 2019. Kubota is the stand-out performer with a 1.8% share in the market considering the company arrived in 2016.

     

    FARM TRACTOR MARKET IN INDIA SIZE AND FORECAST

     

    TOP 3 TRACTOR MANUFACTURER SALES INDIA
    OEM FY 2020 FY 2019
    M&M 310,908 291,901
    TAFE 145,861 120,151
    SONALIKA 120,733 82,958

     

    The farm tractor market in India is estimated at $XX Million in 2020 growing at –4.5% CAGR till 2025.

     

    COMPETITIVE LANDSCAPE IN FARM TRACTOR MARKET IN INDIA

    • Massey Ferguson tractors launched its new DYNATRACK Series – The Hydraulics system of the tractor moves to the top of its segment by offering superior lift capacity, productivity and speed. It has an extendable wheelbase, which makes it ideally suitable for agricultural, haulage and commercial applications
    • Escorts Limited launched India’s first autonomous concept electric tractor Farmtrac Atom 26, which has been manufactured in collaboration with seven technology giants, namely Microsoft, Bosch, Reliance Jio, AVL, Trimble, Samvardhana Motherson Group and Wabco, with the power of next-generation digital vehicle technologies for enabling precision-based farming.
    • Sonalika by introducing advanced technology equipped tractors for the global market throughout the unprecedented year and registered 40.5% growth, which is 3X of industry growth.
    • Sonalika launched the ‘Tiger Electric’ powered by an IP67 compliant 25.5 kW natural cooling compact battery with 1/4th running costs against the traditionally used diesel. The innovative, high-quality battery of Tiger electric tractor can be fully charged with a regular home charging point in 10 hours, which reduces the effort of frequent travelling to petrol pumps for refuel.

     

    MARKET SHARE OF TRACTOR COMPANIES IN INDIA IN 2020

    OEM Market share
    M&M 39%
    TAFE 18%
    SONALIKA 15%

     

    FARM TRACTOR MARKET IN INDIA COMPANIES PROFILED

    Sl no Topic
    1 Market Segmentation
    2 Scope of the report
    3 Abbreviations
    4 Research Methodology
    5 Executive Summary
    6 Introduction
    7 Insights from Industry stakeholders
    8 Cost breakdown of Product by sub-components and average profit margin
    9 Disruptive Innovation in the Industry
    10 Technology Trends in the Industry
    11 Consumer trends in the industry
    12 Recent Production Milestones
    13 Component Manufacturing in the US, EU and China
    14 COVID-19 impact on overall market
    15 COVID-19 impact on Production of components
    16 COVID-19 impact on the point of sale
    17 Market Segmentation, Dynamics and Forecast by Geography, 2024-2030
    18 Market Segmentation, Dynamics and Forecast by Product Type, 2024-2030
    19 Market Segmentation, Dynamics and Forecast by Application, 2024-2030
    20 Market Segmentation, Dynamics and Forecast by End Use, 2024-2030
    21 Product installation rate by OEM, 2023
    22 Incline/Decline in Average B-2-B selling price in the past 5 years
    23 Competition from substitute products
    24 Gross margin and average profitability of suppliers
    25 New product development in the past 12 months
    26 M&A in the past 12 months
    27 Growth strategy of leading players
    28 Market share of vendors, 2023
    29 Company Profiles
    30 Unmet needs and opportunities for new suppliers
    31 Conclusion
    32 Appendix
     
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