South America Utility Tractor Industry

South America Utility Tractor Market Analysis

The South America Utility Tractor Market is expected to register a CAGR of 2.8% during the forecast period.

South America Utility Tractor Market Trends

Rising Labour Scarcity and Wages

Increasing labor wages and lack of farm labor have led to the increasing rates of mechanization in the region. This is driving the growth of the utility tractor market. Farmers are increasingly adopting agricultural mechanization as a substitute for manual labor with a more cost-effective, easily available, and more efficient means of agricultural operation. According to the world bank, the agricultural employment rate in Brazil in 2016 was 10.8% which had declined to 9.39% by 2018. This trend is expected to continue during the forecast period. The declining employment rate in agriculture coupled with the rising cost of labor is enabling farmers to shift towards mechanization. Thus the utility tractors usage will see a growth during the forecast period.

Brazil Dominates the Market

Agriculture is one of the main activities in Brazil that contributes significantly to the Brazilian economy. Brazil is one of the major producers of grain, meat, sugar, coffee, and other products. The declining farm laborers to excessive urbanization and industrialization along with the above factors have created a very strong growth for the agriculture tractors market. As per world bank statistics, Brazil's agricultural land area accounted for 33.9% of the total land area a slight decline from the previous year, and this trend is anticipated to continue during the study period indicating the need for enhancing the productivity which can be done through mechanization. The Government is focused on increasing the agriculture export outputs and hence promoting enhancing farm productivity and the quality of products. The Brazilian government has several incentive programs for agriculture from credit lines. Inovagro, which enables technological innovation of agribusiness, planned for technological advancements had received USD 382 million during 2016-17.

South America Utility Tractor Industry Overview

The South America utility tractors market is consolidated with very few players cornering the majority of the market share. New product launches, partnerships, and acquisitions are the major strategies adopted by the leading companies in the market. Some of the leading players in the market studied are Deere & Company, AGCO Corporation, Mahindra & Mahindra Ltd., CNH Industrial America LLC. and CLAAS KGaA mbH.

South America Utility Tractor Market Leaders