Agricultural Tractors Market

Market Definition

Agricultural tractors are motorized vehicles designed primarily for farming tasks and harvesting crops. They are equipped with specialized attachments or implements, allowing them to perform various functions that help improve the efficiency and productivity of agricultural operations.

Agricultural Tractors Market Overview

Global agricultural tractors market size was valued at USD 73.45 billion in 2023 and is projected to grow from USD 76.81 billion in 2024 to USD 107.10 billion by 2031, exhibiting a CAGR of 4.86% during the forecast period. 

The market is experiencing steady growth, driven by the increasing demand for mechanized farming solutions to improve efficiency and productivity in agriculture. Technological advancements, such as the integration of GPS systems, automation, and electric-powered tractors, are enhancing the performance and functionality of modern agricultural tractors.

Major companies operating in the agricultural tractors industry are Deere & Company, Mahindra&Mahindra Ltd., KUBOTA Corporation, CNH Industrial N.V., AGCO Corporation, SDF S.p.A., J C Bamford Excavators Ltd., ISEKI & CO.,LTD., Daedong Corporation, Sonalika Group, YANMAR HOLDINGS CO., LTD., CLAAS KGaA mbH, Shandong Qilu Industrial Co., Ltd., TAFE Motors and Tractors Limited., and Zoomlion Heavy Industry Science&Technology Co., Ltd.

Labor shortages in agriculture and the need for higher crop yields are propelling the adoption of these machines worldwide. Moreover, government subsidies and incentives for farmers to adopt advanced machinery are fueling market expansion.

• In August 2024, AGCO Corporation participated in the 2024 Farm Progress Show in Iowa, showcasing new products and solutions aimed at enhancing farm productivity and sustainability. The company introduced a new tractor series, along with iinnovations such as the Fendt Lodge, FarmerCore mobile service truck, and Precision Planting’s retrofit solutions.

Key Highlights:

• The agricultural tractors market size was recorded at USD 73.45 billion in 2023.
• The market is projected to grow at a CAGR of 4.86% from 2024 to 2031.
• Asia Pacific held a share of 65.23% in 2023, valued at USD 47.91 billion, and is anticipated to grow at a CAGR of 5.40% during the forecast period.
• The 2WD (Two-Wheel Drive) segment garnered USD 70.92 billion in revenue in 2023.
• The diesel tractors segment is expected to reach USD 100.50 billion by 2031.
• The 41 To 100 HP segment is anticipated to grow at the fastest CAGR of 7.73% through the projection period.
• The row-crops segment is expected to reach USD 57.48 billion by 2031.

Market Driver

"Demand For Higher Productivity and Sustainable Farming Practices"

The increasing demand for higher productivity and efficiency in farming operations is prompting farmers to adopt advanced tractors that offer enhanced performance and precision, propelling the growth of the agricultural tractors market. 

This growth is further supported by the rising adoption of sustainable farming practices, which align with the shift toward tractors equipped with eco-friendly technologies, such as low emissions and fuel-efficient engines, to reduce environmental impact and meet regulatory standards.

• For instance, in September 2024, Mahindra Tractors introduced its first CBG-powered Yuvo Tech+ tractor. Using compressed bio-gas, a renewable fuel, the tractor reduces pollutants and carbon emissions compared to traditional CNG. This launch supports Mahindra’s commitment to sustainable technology, following earlier innovations in alternative fuel tractors such ase CNG, LPG, and dual-fuel models.

Additionally, the growing need for mechanization in developing regions, where labor shortages and the need for higher crop yields, is fueling the demand for agricultural tractors as essential tools in modernizing farming practices.

Market Challenge

"High Cost of Advanced Tractors and Environmental Regulations"

The high cost of advanced tractors poses a significant barrier for small-scale farmers, especially in developing countries, where affordability is a major concern. Many farmers struggle to invest in modern machinery, limiting the growth of the agricultural tractors market. 

This challenge is exacerbated by the additional expenses involved in maintenance and fuel, making tractors an impractical investment for small operations. To overcome this, manufacturers are focusing on producing more affordable models with essential features, and offering financing options or government subsidies to increase accessibility.

Additionally, The high cost of advanced tractors poses a significant barrier for small-scale farmers, especially in developing countries, where affordability is a major concern. Many farmers struggle to invest in modern machinery, limiting the growth of the market. 

This challenge is exacerbated by the additional expenses involved in maintenance and fuel, making tractors an impractical investment for small operations. This can be addressed by implementing training programs and creating user-friendly technologies to ease tractor operations and improve their skills. 

Additionally, stringent environmental regulations on emissions and fuel efficiency are becoming increasingly important for tractor manufacturers. Governments around the world are implementing stricter standards to reduce the carbon footprint of agricultural machinery, posing a challenge for manufacturers to comply while maintaining performance. 

These regulations often require costly modifications to engines and fuel systems, making it difficult for manufacturers to balance environmental compliance with affordability. In response, companies are investing in eco-friendly technologies such as electric and hybrid tractors, as well as advanced emissions control systems, to comply with regulations while maintaining performance.

Market Trend

"Adoption of Autonomous Tractors and Integration of Advanced Technologies"

The increasing adoption of autonomous tractors is transforming the agricultural tractors industry by enhancing operational efficiency and reducing reliance on manual labor. 

These advanced machines leverage GPS, AI, and sensor technologies to autonomously perform key tasks such as plowing, planting, and spraying, significantly improving precision and operational productivity.

• For instance, in January 2025, John Deere unveiled new autonomous machines at CES 2025, designed to enhanced agriculture, construction, and commercial landscaping. The second-generation autonomy kit features advanced computer vision, AI, and cameras to improve navigation in complex environments.

Additionally, the adoption of advanced drivetrain technologies is increasing, with manufacturers improving tractor performance through more efficient transmissions and enhanced powertrains. This improves fuel efficiency, increased productivity, and reduced operational costs for farmers. 

Furthermore, the integration of telematics and connectivity in agricultural tractors is enabling real-time monitoring, data collection, and remote diagnostics, allowing farmers to make more informed decisions and optimize equipment performance.

Agricultural Tractors Market Report Snapshot

Segmentation	Details
By Drive Type	2WD (Two-Wheel Drive), 4WD (Four-Wheel Drive)
By Fuel Type	Diesel Tractors, Electric Tractors, Others
By Engine Power	Less Than 40 HP, 41 To 100 HP, More Than 100 HP
By Type	Orchard Tractors, Row-Crops, Other Types
By Region	North America: U.S., Canada, Mexico
	Europe: France, U.K., Spain, Germany, Italy, Russia, Rest of Europe
	Asia-Pacific: China, Japan, India, Australia, ASEAN, South Korea, Rest of Asia-Pacific
	Middle East & Africa: Turkey, UAE, Saudi Arabia, South Africa, Rest of Middle East & Africa
	South America: Brazil, Argentina, Rest of South America

Market Segmentation:

• By Drive Type (2WD (Two-Wheel Drive) and 4WD (Four-Wheel Drive)): The 2WD (two-wheel drive) segment earned USD 70.92 billion in 2023 due to its cost-effectiveness and suitability for small to medium-sized farms, offering lower initial investment and maintenance costs.
• By Fuel Type (Diesel Tractors, Electric Tractors, and Others): The diesel tractors segment held a share of 94.34% in 2023, attributed to their high power output, extended operational range, and established fuel supply infrastructure.
• By Engine Power (Less Than 40 HP, 41 To 100 HP, and More Than 100 HP): The less than 40 HP segment is projected to reach USD 60.27 billion by 2031, fueled by the growing demand for compact and versatile tractors for small to medium-sized farms and landscaping applications, offering maneuverability and cost-efficiency.
• By Type (Orchard Tractors, Row-Crops, and Other Types): The row-crops segment earned USD 57.48 billion in 2031, propelled by the increasing adoption of advanced row-crop tractors for efficient planting, cultivating, and harvesting of staple crops.

Agricultural Tractors Market Regional Analysis

Based on region, the market has been classified into North America, Europe, Asia Pacific, Middle East & Africa, and Latin America.

Asia Pacific agricultural tractors market accounted for a share of around 65.23% in 2023, valued at USD 47.91 billion. This dominance is primarily bolstered by the region’s large agricultural sector, rapid adoption of mechanized farming solutions, and favorable government policies supporting agricultural mechanization. 

The increasing demand for higher crop yields, coupled with the need to overcome labor shortages, further boosts regional market growth. Countries such as China, India, and Japan are witnessing significant growth in tractor sales, supported by rural development initiatives and a shift toward precision farming technologies. 

The regional market further benefits from continuous advancements in tractor technology and increasing investments in automation and electrification.

Europe agricultural tractors industry is set to grow at a CAGR of 4.79% over the forecast period. This expansion is largely attributed to the increasing adoption of advanced agricultural machinery to meet the demands of a growing population and changing climate. 

European countries are increasingly adopting innovative tractor technologies, including GPS guidance systems, electric tractors, and autonomous machinery. 

Government incentives and policies promoting sustainability and environmental consciousness are further aiding this growth. With a strong focus on mechanization and precision farming, Europe market is expected to witness major growth.

• In August 2023, Mahindra & Mahindra launched its new OJA range of lightweight tractors in India, with plans for subsequent launches in North America, ASEAN, Brazil, Australia, South Africa, Europe, and the SAARC region. Thailand was the first ASEAN country to see the launch in 2024.

Regulatory Framework Also Plays a Significant Role in Shaping the Market

• In the U.S. agricultural tractors are regulated by several agencies. The Occupational Safety and Health Administration (OSHA) mandates the use of Rollover Protection Structures (ROPS) for tractors operated by employees, while the U.S. Environmental Protection Agency (EPA) regulates engine emissions. The National Agricultural Safety Database (NASD) aims to reduce tractor-related injuries.
• In the European Union, agricultural tractors are governed by Regulation (EU) No 167/2013 for type-approval and market surveillance, Delegated Regulation (EU) No 1322/2014 for construction standards, and Regulation (EU) 2015/68 for braking performance. Commission Implementing Regulation (EU) 2018/986 ensures compliance with Stage V emissions standards.
• In APAC, China's agricultural tractors are regulated by the Ministry of Agriculture and Rural Affairs (MARA), with safety standards set by National Standards of China (GB). They require China Compulsory Certification (CCC) certification and Stage IV emissions compliance. Autonomous tractors are overseen by the Ministry of Industry and Information Technology (MIIT).
• In Japan, Japanese Agricultural Standards (JAS) are national standards established by the Minister of Agriculture, Forestry and Fisheries in the field of agriculture.
• In India, agricultural tractors are governed by the Ministry of Agriculture and Farmers Welfare (MoA&FW) and the Ministry of Road Transport and Highways (MoRTH). Tractors must comply with Bureau of Indian Standards (BIS) and undergo testing by the Automotive Research Association of India (ARAI).

Competitive Landscape:

The agricultural tractors market is characterized by a number of participants, including both established corporations and emerging players. Key market players are emphasizing product innovation, technological advancements, and geographical presence to gain a competitive edge. 

Leading companies dominate the high-end segment, offering advanced tractors with features such as automation, GPS systems, and autonomous capabilities for large-scale commercial farming operations. Meanwhile, smaller and emerging players focus on providing cost-effective solutions, enhancing accessibility for small and mid-sized farms.

Manufacturers in the agricultural tractors industry are increasingly focusing on continuous innovation in tractor design and functionality, focusing on fuel efficiency, integrate eco-friendly technologies, and improve overall performance to meet the evolving demands of modern agriculture.

• For instance, in January 2025, Topcon Agriculture enetered a strategic distribution agreement with PFG America, the exclusive U.S. distributor of Deutz-Fahr tractors. This partnership allows PFG America’s dealers to offer Topcon’s precision agriculture solutions, including GPS-guided equipment, variable rate application technology, and data management software, to farmers nationwide.

List of Key Companies in Agricultural Tractors Market:

• Deere & Company
• Mahindra&Mahindra Ltd.
• KUBOTA Corporation
• CNH Industrial N.V.
• AGCO Corporation
• SDF S.p.A.
• J C Bamford Excavators Ltd.
• ISEKI & CO.,LTD.
• Daedong Corporation
• Sonalika Group
• YANMAR HOLDINGS CO., LTD.
• CLAAS KGaA mbH
• Shandong Qilu Industrial Co., Ltd.
• TAFE Motors and Tractors Limited
• Zoomlion Heavy Industry Science&Technology Co., Ltd.

Recent Developments (M&A/Launch/Seeding)

• In August 2024, Yanmar Holdings Co., Ltd. acquired all shares of CLAAS India, a leading agricultural machinery manufacturer, through its subsidary Yanmar Coromandel Agrisolutions. The acquisition aims to expand Yanmar's agribusiness presence in India by integrating a company with a world-class facility and a proven track record in high-quality combine harvesters.
• In July 2024, Monarch Tractor secured a USD 133 million in Series C funding round, marking the largest investment in agricultural robotics to date. The funds will support the development of Monarch's MK-V electric autonomous tractor and the WingspanAI farm management platform while enabling domestic and global expansion.
• In February 2024, AGCO launched the Massey Ferguson 3 Series Specialty tractor in North America, designed for vineyards and orchards. The series offers 75-115 HP models with customizable options for efficiency, comfort, and reduced carbon footprint, ensuring a quick return on investment and lower operating costs.
• In February 2024, John Deere launched several new products at the Commodity Classic tradeshow, including high-horsepower 9RX tractors, C-Series air carts, AI-enabled See & Spray Premium technology for sprayers and S7 Series combined with fuel-efficient engines and advanced automation.
• In June 2023, Swaraj Tractors launched the 'Swaraj Target,' a new Compact Light Weight tractor range designed for Indian farmers. The range combines power, advanced features, and technology, offering enhanced efficiency for tasks such as spraying and intercultural operations.