South America Agricultural Tractor Market Outlook, 2029

South America Agricultural Tractor Market Outlook, 2029

Throughout the projected period, there is expected to be growth in the South American agricultural tractor market. The rate of farm mechanization in the region is consistent with the recent increase in tractor sales recorded in South America. While soybeans and sugarcane are the main crops driving the demand for tractors with higher horsepower ratings, other key crops in the region that necessitate the use of associated gear for spraying have also increased demand for tractors in general. In addition, the cost of labour has increased in recent years as a result of the growing scarcity of farm labour. In South America, Brazil is the tractor market leader. To encourage tractor modernization, the Brazilian government introduced the Moderfrota agricultural credit program in 2015. In the Brazilian tractor market, Deere & Company holds the largest market share, followed by AGCO Corporation and CNH Industrial NV. While CNH Industrial NV makes tractors in Rio Verde, Curitiba, Piracicaba, and Sorocaba, Deere & Company has multiple production facilities in Catalão, Montenegro, and Horizontina. The market has been driven in recent years by these companies' on-going product improvements that introduce locally appropriate farm requirements in tractors. Tractor sales in South America are concentrated among a small number of significant firms who compete not only on the basis of equipment quality and promotion but also on strategic efforts to increase their market shares. Leading tractor companies in the region have embraced collaborations, acquisitions, and new product launches as their primary tactics. There are well-known companies in the open fields and horticulture divisions of the Latin American tractor market. There is not much of a threat from new merchants to the area's current vendors.

According to the research report ""South America Agriculture Tractor Market Outlook, 2029,"" published by Bonafide Research, the South America Agriculture Tractor market is projected to add more than USD 800 Million from 2024 to 2029. Fertile plains and abundant agricultural resources are the hallmarks of South America. The need for agricultural tractors is fueled by the growth of agribusiness businesses, such as commercial agriculture and large-scale farming operations. Modern, high-capacity tractors are essential for agribusinesses to boost production, profitability, and operational efficiency. The South American market for agricultural tractors is mostly driven by the introduction of mechanized farming techniques. In an effort to increase productivity and lessen their reliance on manual labour, farmers are mechanizing their operations more and more as labour costs rise and labour supply changes. Mechanized farming relies heavily on tractors, which help farmers carry out a variety of duties effectively, such as clearing land, planting, cultivating, and harvesting. The Amazon basin, the Pampas region, and the Cerrado savanna are just a few of the large areas of arable land in South America that are ideal for agriculture. The necessity for tractors to prepare and cultivate additional farmland is driven by the extension of agricultural frontiers and the conversion of wooded areas into crops. Farmers can increase the productivity of recently opened agricultural areas with the aid of tractors outfitted with cutting-edge features and technologies. Many different types of crops, such as soybeans, corn, sugarcane, coffee, fruits, and vegetables, are produced in large quantities throughout South America. The need for customized tractors made for particular cropping systems and agricultural techniques is driven by the diversification and specialization of crop production. Farmers in different crop types and regions have distinct needs, and tractors with different horsepower ratings, implements, and attachments meet those needs.

Major Drivers

Growing Farm Labour Costs Are Driving the Market: Based on basic demand-supply economics, the cost of farm labour directly affects the share of a nation's population that works in agriculture. This has an impact on the local market for agricultural tractors. The population in emerging economies, like Brazil and Argentina, is generally more dependent on agriculture. But as more and more individuals move to cities each year, the percentages have decreased over time. The cost of farm labour is increasing as a result of the decrease in agricultural labour. Therefore, during the projection period, there is expected to be a rise in the demand for agricultural tractors.

Policies and Incentives of the Government: The demand for agricultural tractors in South America is driven by government programs and incentives that are intended to promote agricultural modernization and development. To encourage farmers to invest in agricultural equipment, such as tractors, governments may provide subsidies, tax breaks, and loan facilities. These regulations support the development of mechanized agricultural methods and assist in lowering entry barriers for smallholders. Governments in South America are increasingly focusing on promoting sustainable agricultural practices and environmental conservation. Policies and incentives that encourage sustainable farming methods drive the adoption of modern tractors equipped with advanced technologies for precision agriculture, reduced emissions, and resource-efficient farming.

Major Challenges

financial difficulties: It can be difficult for many South American farmers, particularly smallholders and rural producers, to get credit and funding for buying tractors. Farmers may have trouble affording new tractors due to financial institutions' strict lending standards or high interest rates. The adoption of effective farming practices is impeded and the overall demand for tractors is reduced when farmers are unable to purchase new tractors and mechanized equipment due to limited financing options. Changes in commodity prices have a significant impact on South American agriculture and can affect farmers' purchasing power and income. Farmers may decide to delay or reduce their investments in new tractors during times of low commodity prices in favour of putting money toward operating and necessary expenses. This may result in a decline in the market's demand for tractors.

Land Tenure and Dispersal: Smaller farms as a result of fragmented land holdings restrict the economies of scale that farmers can get. There may be less of a market for huge, powerful tractors on smaller farms since they cannot afford to buy them. Inefficient land use techniques, such as asymmetrical plot layouts and ineffective crop rotations, are frequently the result of fragmentation. The total productivity of agricultural operations and the requirement for tractors to effectively manage bigger, more contiguous land holdings can both be impacted by this inefficiency. Adoption of automated agricultural practices, such as the use of tractors and machinery, might be hampered by small and dispersed land holdings. Limited-land farmers might favour manual labour or conventional agricultural practices, which could impede the adoption of contemporary tractors and mechanized technologies.

Based on the Engine Power, the market is divided into 30 HP, 30 HP - 100 HP, 100 HP - 200 HP, and Above 200 HP.

In the South American agricultural tractor market, the category with less than 30 horsepower is becoming more significant. Smallholder farmers who manage modest land holdings are prevalent throughout South America. These smaller farms operate at a scale best suited for tractors with lower horsepower ratings (below 30 HP). In South America, there is a movement toward agricultural diversification with a growing emphasis on small-scale farming, horticulture, and specialty crops. Fewer than 30 HP tractors are flexible and adaptive for a variety of duties in these diverse farming settings.

Based on the Drive Type, the market is divided into 2WD, 4WD.

The leading part is 4WD. The topography of South America is varied, encompassing hilly areas, damp meadows, and undulating hills. Tractors with higher traction and stability are required in these difficult conditions, and 4WD variants excel in these areas. Furthermore, muddy fields are caused by severe rains in some areas, which emphasize the need for 4WD's improved grip and control. Larger planters, sprayers, and combine harvesters are examples of the heavier equipment used in modern farming operations. These call for tractors with more pulling capacity and stability, which 4WD models easily offer. Particularly on hills or in damp conditions, 4WD tractors manage these tools more skilfully, increasing production and operational efficiency.

Based on the Level of Autonomy, the market is divided into Manual Tractor Vehicle, Autonomous Tractor Vehicle.

In the agricultural tractor market for South America, the manual tractor vehicle segment is becoming more and more significant. Since they are frequently less expensive than their automated equivalents, manual tractor vehicles are available to smallholder farmers and individuals with restricted financial resources. A cheap way to mechanize farm activities in areas where purchasing agricultural gear with capital is difficult is by using manual tractors. Smallholder farmers who work small land holdings are prevalent in South America. These small-scale farming businesses, where the size of the land and the volume of production may not justify the investment in larger, mechanized tractors, are a good fit for manual tractor vehicles.

> Based on the Application the market is divided into Harvesting, Seed Sowing, Spraying, Others.

In fact, the market for agricultural tractors in South America is seeing growth in the harvesting category. There is now more focus on robotic harvesting methods in South America due to the growth of large-scale agribusiness enterprises, especially in nations like Brazil and Argentina. Large crop volumes and market demands require agribusinesses to have harvesting equipment that is both efficient and highly capacious. For farmers, the cost and availability of labour can present serious obstacles, particularly during the busiest harvest seasons. Combination harvesters and specialty tractors' attachments are examples of mechanized harvesting equipment that helps farmers overcome manpower shortages and lessen their reliance on manual labour, increasing their operational efficiency and cost-effectiveness.

Based on country report is majorly divided into three major countries, Brazil, Argentina, Colombia.

Brazilian agriculture has always relied heavily on labour-intensive farming practices. Furthermore, over the past few years, nonsupervisory employed farm workers' average hourly real wage has climbed, which has raised demand for tractors across the nation. Only the United States is the world's greatest exporter of agricultural products, with Brazil coming in second. Brazil's farmers are building successful agricultural enterprises on terrain that was deemed unusable for agriculture hundreds of years ago, thanks to technological advances in agriculture that help farmers worldwide. These processes also use less area and are more productive, allowing for a larger harvest. In addition, governments in certain developing countries are offering financial assistance and subsidies to support the automation of important agricultural procedures. Furthermore, newer tractors with GPS and telematics pre-installed have become available due to various technological advancements. The growing acceptance of automated tractors and the pervasiveness of wireless connectivity for remote monitoring both of which may be applied to agriculture are projected to propel the global market for agricultural tractors. A new frontier of innovation emerged when digital technology and agriculture came together, opening up several possibilities for the advancement of smart agriculture. The tractor market in Argentina is very competitive, with companies constantly striving to create and ensure distinctive products at competitive prices. Modern tractors with cutting-edge technology are already available on the market. The accuracy and productivity of farming are increased by the use of GPS and remote sensing. The majority of Argentina's highly concentrated tractor market is controlled by the top businesses. The market for agricultural tractors in Colombia is a reflection of the country's diverse agricultural landscape, as well as its economic situation, laws and regulations, and advancements in technology. Agriculture employs a sizable portion of the labour force and contributes to both exports and Colombia's domestic food supply. The country's topography and climate make it ideal for a range of agricultural activities, including the raising of cattle, fruit, coffee, palm oil, and fruit. Colombia's agricultural sector is composed of large commercial operations, medium-sized enterprises, and smallholder farms. Smallholder farms are prevalent, especially in rural areas, and usually rely on manual labour or small-scale machinery.

Vendors actively invest in R&D to develop fundamental technology to establish competitiveness by enhancing core product technology in the agricultural tractor industry. Vendors differentiate themselves by enhancing product development, focusing on after-sales business, and cutting costs through greater operational efficiency. There is competition in the industry in the pursuit of large-scale farming. The agriculture industry is experiencing slow growth and tends to have a competitive environment, heavily influenced by price due to supply balancing demand. Price competition tends to be more significant for new tractor orders than aftermarket services. Considering the forecast for 2029, pricing for new tractor orders is expected to be a particularly influential competitive factor. Competition in the aftermarket portion of the tractor market is majorly against large, well-established national and global competitors and, in some markets, against regional and local companies.

Considered in this report
• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in this report
• Agricultural Tractor market Outlook with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Engine Power
• Below 30 HP
• 30 HP - 100 HP
• 100 HP - 200 HP
• Above 200 HP

By Propulsion
• IC
• Electric

By Drive Type
• 2WD
• 4WD

By Level of Autonomy
• Manual Tractor Vehicle
• Autonomous Tractor Vehicle

By Application
• Harvesting
• Seed Sowing
• Spraying
• Others

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Agricultural Tractor industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.

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