Agricultural Tractor Market Strengthens with Automation Technologies

The global agricultural tractor market was estimated at 3,098.2 thousand units in 2023 and is projected to reach 4,965.5 thousand units by 2030, representing a compound annual growth rate (CAGR) of 7.2% between 2024 and 2030. The strong demand is driven by increased need for compact tractors on smaller farms as well as advances in technology such as the integration of telematics with tractors.

Key Market Trends & Insights

  • In 2023, the Asia Pacific region held the largest volume share globally—accounting for more than 74.57% of the market—and is expected to maintain this dominant position over the forecast period.
  • Within North America, the United States is anticipated to contribute a significant revenue share.
  • By driveline, the two-wheel drive (2WD) segment held over 80.78% of the market in volume terms in 2023, reflecting its strong global preference.
  • In terms of engine power, tractors under 40 HP represented more than 62.25% of volume in 2023, driven primarily by demand from smaller-sized farms.

Mechanization adoption continues to speed up—particularly as labor migrates from rural to urban regions—creating demand for tractors. The COVID-19 pandemic initially caused production and supply chain disruptions, but demand rebounded in H1 2022 with double-digit growth in major economies such as the U.S., Canada, the U.K., Germany, China and India.

Meanwhile, OEMs raised tractor prices by between 4% and 22% in 2022 due to low inventory levels, semiconductor shortages, supply disruptions and the increasing cost of steel and aluminum.

Governments globally are encouraging mechanization through favourable loan schemes and subsidies (for example, in the U.S., Canada and U.K.), and the shift to electric and driverless tractors is on the rise.

Market Size & Forecast

  • The volume of the market in 2023 stood at 3,098.2 thousand units, with projections reaching 4,965.5 thousand units by 2030 at a CAGR of 7.2% from 2024 to 2030.
  • The Asia Pacific region led in 2023 and is expected to grow at the fastest rate, driven largely by India, China and other regional markets.
  • In Asia Pacific, smallholder farms dominate (with around 85% of farmlands being below 10 hectares), which strongly supports the market for tractors under 40 HP.
  • In Europe, growth is moderate and is driven by demand for larger farm tractors in countries like Italy, Greece and Lithuania as well as the rising interest in autonomous tractors. However, production delays and long waiting periods are expected to hamper growth in some quarters.

Order a free sample PDF of the Agricultural Tractor Market Intelligence Study, published by Grand View Research.

Key Companies & Market Share Insight

The agricultural tractor market is in a stage of high growth with rapid innovation driven by increasing adoption of machine learning, big data and computing power.

M&A activity is high among leading players seeking to expand offerings and consolidate in this growing market.

Pressure from environmental regulations on internal-combustion engine tractors is prompting manufacturers to shift toward electric models, aligning with global carbon reduction efforts.

Companies are launching driverless and autonomous tractor concepts to meet future demand. For instance, major firms like Deere & Company, CLAAS KGaA mbH, Escorts Ltd., Solectrac and Monarch are among those bringing these innovations to market.

Key Companies List

  • AGCO Corporation
  • CNH Industrial N.V.
  • Deere & Company
  • CLAAS KGaA mbH
  • Escorts Ltd.
  • International Tractors Ltd.
  • Yanmar Co., Ltd.
  • Kubota Corporation
  • Mahindra & Mahindra Ltd.
  • Tractors and Farm Equipment Ltd.

Conclusion

In summary, the agricultural tractor market is poised for strong growth through to 2030, supported by increased mechanization in agriculture, rising labour shortages in rural areas, and evolving technology trends such as electric and autonomous tractors. The dominance of the Asia Pacific region—especially through smaller-farm demand—and the prevalence of low-power and 2WD tractor segments highlight key structural features of the market. Meanwhile, leading companies are actively innovating and consolidating to capture future opportunities. These factors together indicate a dynamic, rapidly transforming market landscape.

Explore Horizon Databook – The world’s most expansive market intelligence platform developed by Grand View Research.

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