Market Trends of Brazil Tractors Industry
Increasing Need for Agricultural mechanization
- Machinery inputs in agriculture by way of mechanization have evolved considerably in recent years in the country. The introduction of internal combustion engines and tractors as power sources brought about a revolution in the agriculture sector by covering large agricultural areas in a short time.
- Labor-saving technologies, particularly in harvesters and tractors, are being increasingly adopted to expand farm operations. The increased liberalization would radically reinforce a structural evolution, which will help bring about increased adoption of advanced agricultural machinery tools in agricultural operations, which in turn is likely to increase the demand for tires during the forecast period.
- The Government of Brazil launched the Agricultural and Livestock Plan that allocates credit lines to farmers with lower interest rates as compared to market interest rates. This is likely to boost agricultural machinery sales across the country, which in turn is anticipated to boost the market during the forecast period.
- Most of the rural areas are usually driven by the urbanization of economies. Thus, an ongoing shift in all rural activities is taking place. Urbanization is spreading into the rural areas around the metropolitan centers, where migration is rampant. With the increase in urbanization, the demand for mechanization of agricultural machinery will increase in the coming years.
- Moreover, governments in several developing nations are providing subsidies and financial aid to help with the automation of key agricultural processes. Furthermore, as a result of different technical breakthroughs, modern tractors with pre-installed GPS and telematics systems have emerged.
- Due to technological breakthroughs that are altering farming and agricultural processes, the industry is also gaining attraction. Agricultural tractors with self-driving capabilities are projected to boost productivity and efficiency in the industry. CNH Industrial NV, Escorts Limited, and Deere and Company have all already released concepts for autonomous and electrified tractors.
- With the above-mentioned development across the country, the demand for tractors is likely to increase during the forecast period.
Below 40 HP Tractors are dominating the market
- The industry trend toward bigger horsepower tractors continues to grow in the country, owing to greater performance in difficult terrain and versatility in farm and non-farm applications. Less than 40 HP tractors are often identical to the term compact tractors. With an engine displacement of not more than 1500 CC, these tractors occupy less space and can be aligned with great flexibility.
- Below 40 HP powered tractors usually weigh less than 1900 kg and have a power rating of less than 40 HP. They are designed to be used with mowers and light-duty material handling equipment. Factors such as compact size, ease of customization, and nearly 50% more price for the next power range of tractors are witnessing major growth during the forecast period.
- Growing agricultural activity across the country is likely to increase the demand for low-power tractors. The low cost of below 40 HP tractors increased the affordability rate among the highly populated small-scale farmers. Brazil is the largest country in terms of arable land, one of the top producers of 34 agricultural commodities, and the largest agricultural net exporter. Manual plowing, harvesting, and other operations are found to be unfeasible and time-consuming. This has led farmers to opt for tractors and other types of machinery, which in turn is likely to enhance the demand for small tractors in coming years.
- Major tractor manufacturers are introducing new models of tractors across the country, which in turn is likely to witness major growth for the market during the forecast period. For instance, In August 2021, Kubota introduced its new LX Series, a range of multi-purpose compact tractors under 40 HP with two different models, namely the 35HP LX-351 Rear ROPS and LX-351 Cab.
- With the above-mentioned development across the country, the below 40 HP tractors are witnessing major growth during the forecast period.