The European agricultural tractor machinery market is projected to record a CAGR of 3.9% during the forecast period (2020-2025).

  • Germany, the United Kingdom, and France are some of the biggest markets for tractors in the European Union. In the United Kingdom, tractor registrations are an important indicator to determine the strength of the domestic market for agricultural machinery. In terms of value, the sales of tractors, coupled with the accessories, account for almost half of the expenditure of the farmer. At the regional level, northern England performed better than southern England in 2018, with exceptions like Wales and northern Ireland, who witnessed the higher number of agricultural tractor registrations.
  • CLAAS Group, Deere & Company, Mahindra & Mahindra Ltd, and AGCO Corporation are some of the prominent players who are operating in this market.



Key Market Trends

Rising Farm Labor Cost is Driving the Market for Tractors

Agriculture in the European Union has traditionally been a labor-intensive sector characterized by a higher number of seasonal immigrant workers working on farm fields in the member states. However, an acute shortage of farm labor has currently surfaced on the farm fields in the region. According to the German Association of Agricultural Employers (GLFA), the number of seasonal immigrant labor during the peak harvest times in Germany fell drastically in the last few years, which has further led the way to a pilot project model enabling German farmers to hire workers from Western Balkan countries till 2020. Thus, a shortage of farm labor is giving way to rise in wage rates, thereby allowing the farmers to adopt farm mechanization, including tractors, in the region.

Germany is Leading the Market

Germany is one of the largest markets for agricultural tractors in Europe. The production of tractors saw a remarkable upsurge over the past few years. The country generates more than 27% of agricultural machinery and equipment components manufactured in Europe. Thus, Germany has evolved to be one of the leaders in producing agricultural machinery in Europe, which signifies its dominance in the agricultural tractors market. Due to the booming domestic market, the export ratio in the past few years has been steady at between 50-60%. As per CEMA (Conveyor Equipment Manufacturers Association), the average size of a new tractor sold in Germany for the agricultural purpose during 2015, was around 155 HP, and every fifth tractor had more than 200 HP of engine power.

Competitive Landscape

CLAAS Group, Deere & Company, Mahindra & Mahindra Ltd, and AGCO Corporation are some of the prominent players who are operating in this market. These companies are investing heavily in R&D and are launching tractors that cater to the needs of farmers in this region.

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