China Agricultural Machinery Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

China Agricultural Machinery Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The China Agricultural Machinery Market is projected to grow at a CAGR of 5.8% during the forecast period (2020 - 2025). China is one of the largest manufacturers of farming equipment and the largest market for agricultural machinery, worldwide. Most of the agricultural machinery industries are mainly concentrated in Shandong, Henan, Jiangsu, Liaoning, and Zhejiang provinces and the bestselling types of agriculture machinery’s in the country include large tractors and harvesting machinery products with high horsepower and high degrees of automation. Nearly 2,500 agricultural equipment manufacturers are concentrated only in the provinces of Shandong, Henan, Jiangsu, Liaoning, and Zhejiang. Although the agricultural machinery industry is evolving technically, lack of human capital, the necessary infrastructure to develop sophisticated farming machines, which are able to compete with foreign products is some of the major factors restraining the growth of the market. Due to this, China relies heavily on foreign imports for high-tech farming machinery.

Key Market TrendsIncreasing Cost of Farm Labor

The cost of farm labor has a direct relationship with the percentage of the total population of a country employed in agriculture, considering simple demand-supply economics, thereby affecting the china agricultural machinery market. On average, developing economies such as China have larger percentages of the population dependent on agriculture. However, the percentages have decreased over time as a large number of people are migrating to the urban area every year. Due to decreasing agricultural labor, the prices of farm labor are rising. Hence, it is expected to increase the demand for agricultural machinery during the forecast period.

Tractor Dominate the Overall Market

China’s agricultural machinery had been facing several challenges, like overcapacity and low profit-margins, after the provision of a year-long subsidy scheme for promoting mechanization in the farming, which led to the mass production of low-quality tractors. Farmers’ have become unfavorable toward purchasing equipment due to the decline in grain prices and lower return on equipment investment. The demand for agricultural tractors reduced during 2016 and 2017, owing to the high existing numbers of tractors and the changes in the subsidy regime for purchasing new tractors. Although the subsidies per machine have declined, the system is now more inclined toward large tractors, as the government seeks to enhance productivity and the yields. In northern China, high horsepower tractors are used on a large scale, as the farm sizes are generally large, unlike in southern China, where farm sizes are quite small. Large farm tractors are expensive, so many farmers outsource their cropping work to third-party contractors, who value the performance and profitability of their investment.

Competitive Landscape

In the Chinese agricultural machinery market, companies are not only competing based on equipment quality and promotion but are also focused on strategic moves, in order to hold larger market shares. New product launches, partnerships, and acquisitions are the major strategies adopted by the leading companies in the market studied. Mostly the agricultural equipment industry in the country is dominated by a large number of unspecialized manufacturers producing low technology machinery. The top five domestic manufacturers account for less than 25% of the market. Major Chinese agricultural equipment companies include First Tractor, the YTO Group, and Changzhou Dongfeng Agricultural Equipment.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned

IBM Corporation
Oracle Corporation
Internap Corporation
Packet Inc. (An Equinix Inc. Company)
Scaleway Inc.
Amazon Web Services Inc
Rackspace Inc.
CenturyLink, Inc.
LightEdge Solutions, Inc

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