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com
 Aim:
To develop an understanding of the “world/industry” our company operates in.
This information is not part of the pre-seen analysis released by CIMA.
It is only to be used before diving into the pre-seen to have a prior idea of what the
agricultural tractor manufacturing industry is like in the global world.
So, once you start with our detailed pre-seen analysis you can start relating and
picking up points from the very beginning.
Tractors are traditionally agriculture equipment that is used to
perform farming operations such as ploughing, tilling, and planting.
They are also used for spreading fertilizers, clearing bushes, and other
activities.

The global agricultural tractors market was valued at $59.1 billion in

2021, and is projected to reach $97.8 billion by 2031, growing at a
CAGR of 5.6% from 2022 to 2031.

The cost of labour has been increasing at significantly high rates due to
the urbanization and migration of people to urban areas. The cost of
farm labour is directly proportional to the cost of production.
Mechanization can reduce labour wages. The increasing labour wages
and the lack of farm labour have led to increasing rates of
mechanization.
• The usage of tractors for non-agricultural purposes has been growing over the
years and is currently at almost 40%.
• Apart from farm-related tasks, tractors are increasingly being deployed in sand
mines, brick kilns, road making, ferrying passengers.
• Although, tractors had always been used in non-farm purposes, earlier it was
more personal in nature. However, now the usage is more commercial in nature
and growing fast.
• The tractor manufacturers are well aware of this phenomenon and the modern
tractors are increasingly being improvised to serve this aspect as well.
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The increase in demand for compact tractors on small farms and technical
developments such as the integration of telematics with agricultural tractors are
expected to drive growth.
Furthermore, the quick adoption of mechanization is expected to be favourable for
the market's expansion.
Additionally, it is anticipated that the market will witness growth due to the
migration of farm workers to cities, which would result in a labour shortage so more
atomization will be promoted.
Strong crop production in U.S., Canada, the U.K., Germany, China, and India, along
with the need to replace aging equipment, is increasing product sales.

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A sudden increase in demand led to lower inventory levels of tractors and are
presumed to increase agricultural tractor prices from 4% to 22%, which is anticipated
to slow down the market growth. It is attributed to low inventory levels of tractors
experienced by dealers.
Also, certain manufacturers are currently experiencing a shortage of semiconductors
coupled with supply chain disruptions and market uncertainty which may delay
production.
Furthermore, a hike in steel and aluminium prices is expected to increase tractor
prices, which is further anticipated to hinder market growth over the next few
quarters.
The fragmented lands, diverse machinery types and facilities, poor utilization rate,
higher fuel consumption, and lack of knowledge are the restraining factors of the
market. Though the adoption of farm mechanization is increasing, it is primarily
region-specific.
Agricultural equipment can use technology like high-precision positioning systems (such as
GPS and GNSS, automated steering systems, geo-mapping, sensors, and remote sensing).
For instance, Deere & Company provides Precision AG technology for farm machinery like
tractors and other items. The company provides display systems, receivers for seeding and
planting, harvesting, and field preparation and tillage equipment.

Real World
Trends
The increasing number of farm training programs promoting the use of agricultural
machinery on a wide scale is also driving the tractor industry. Ease of customization
makes them more amenable to experimentation, and consequentially,
manufacturers are willing to try new components and technologies in this segment
before moving on to high-powered ones.
Governments in developing countries like India promote farm mechanization by subsidizing equipment
purchases and supporting bulk buying through front-end agencies.

Furthermore, due to the increasing demand from developing countries, the major players in the market are
innovating new products.

For instance, in February 2021, TAFE launched a new DYNATRACK Series, which is an advanced range of tractors
that offer dynamic performance, sophisticated technology, unmatched utility, and versatility, engineered into a
single powerful tractor. These factors are likely to drive the market during the forecast period.​

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Compiled by Finntutors.com
 Asia Pacific led the global market with a
volume share of more than 69% in 2022
and is estimated to grow at the fastest
CAGR over the forecast period retaining
the dominant position.

The growth is driven by India, followed by

China and the rest of Asia Pacific.

India led the APAC regional market

accounting for more than 54 % share in
2022.

In India, product sales are expected to

reach over 900 thousand units by 2022.
Easy loan availability, favorable Minimum
Support Price (MSP), and better monsoon
are expected to bode well for the regional
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The agricultural tractor market is
consolidated, with major players
occupying a significant market
share.

Deere and Company, Kubota

Corporation, CNH Industrial NV,
AGCO Corporation are the major
players in the market.

New product launches, partnerships, and acquisitions are the major strategies
being adopted by the leading companies in the global market.

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November 2022: VST Tillers Tractors Ltd and ZETOR TRACTORS unveiled two best-in-class tractors at
the CII Agro Tech India 2022 exhibition. These 45 HP and 50 HP category tractors are jointly developed
by VST & ZETOR at their India & Czech Republic plants.

July 2021: New Holland North America launched T7 Heavy-duty Tractor with PLM Intelligence as an
addition to its line of agricultural tractors. The new tractor is aimed to help farmers be more
productive, enabling multi-tasking in a variety of field and transport applications.

June 2022: Solis Yanmar company launched three new tractor models in the below 30 HP category for
Turkish farms that are to be exported from India.
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 Take-Aways From This Industry Analysis:
All this information will help you get into the ‘world’ of the company we are about to understand in the
detailed pre-seen analysis.

So, when we start with our pre-seen analysis you will already be in the ‘zone’ of understanding what the
agricultural tractors manufacturing industry is like.

The Case Study Exam is a simulation of problems so any ideas you pick up from this document or any
documents to come can be used in your answers.
All the examples and necessary information above is very relevant to the ‘world’ of our company and can
definitely be used when writing an actual answer.

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 Source:

https://www.mordorintelligence.com/industry-reports/agricultural-tractor-market

https://www.grandviewresearch.com/industry-analysis/agricultural-tractors-
market#:~:text=Report%20Overview,6.9%25%20from%202023%20to%202030.