Asia-Pacific Agricultural Machinery Market - Growth, Trends and Forecast (2020 - 2025)
The agriculture machinery market is expected to grow at a rate of 6.1% during the forecast period. Asia-Pacific caters to half the demand for agricultural machinery in the global market. The shrinking labor force and increased awareness among the farmers regarding advanced agricultural practices are the prime reasons for the demand for agricultural machinery. Furthermore, the rise in technological advancements in agriculture equipment; an increase in demand for pre-owned agriculture equipment will accelerate the revenue share. The lack of skilled professionals and the high cost of machinery is the key constraints of the market.
Key Market Trends
Lack of Farm Labor and Increase in Farm Wages
The cost of farm labor is directly proportional to the cost of production, hence increasing labor wages and lack of farm labor is driving the agriculture machinery market in the Asia Pacific region. For instance, the average rise in the daily farm wages noticed in India is USD 0.2 in the last few years. This trend is anticipated to continue further as farm labor is decreasing because of the migration of rural people to urban regions. For example, every year 0.5 to 1% decline is noticed in farm labor availability in China.
India and China Dominates the Market
India and China together account for 60% of farm machinery share in Asia Pacific Region. The demand for farm mechanization in India and China has been continuously increasing at a significant rate. Lack of labor, the need to increase farm productivity, contract farming, and government incentives are the prime market drivers. A high labor wage is also a key factor in the market. Tractors occupy the major part of market share among all the farm machinery in this region with 63.19% of the total Asia Pacific of tractor sales in the year 2019.
The market is highly competitive with the presence of a few prominent players, accounting for more than half of the market. New product launches, partnerships, and acquisitions are the major strategies adopted by the leading companies in the market studied. Deere and Company, AGCO Corp, CNH Industrial N.V, Kuhn Group, Kubota Tractor Corp. Mahindra & Mahindra Ltd. Tractors and Farm Equipment Ltd. are some of the leading players in this region.
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