Market Trends of Vietnam Agricultural Machinery Industry
This section covers the major market trends shaping the Vietnam Agricultural Machinery Market according to our research experts:
Increasing Farm Mechanization with Shortage of Labor
According to the Ministry of Agriculture and Rural Development in 2020, the level of mechanization in agriculture is increasing in the pre-and post-harvest stages. Specifically, the rate of mechanization of agricultural land preparation reached 94%, 42% of sowing and planting care reached 77% and that of rice harvest reached 65%.
Vietnam is facing an acute shortage of labor in agriculture with the population shifting to construction and other fields expecting better income. This has been a crucial factor in the increased use of machinery across various processes. The shift in occupational structure from agriculture to different sectors is mainly occurring in the four regions: The Red River Delta, the North Central and the Central Coastal areas, the Mekong River Delta, and the South East. Shortage of seasonal agriculture labor is the major driver for the implementation of machinery in agriculture, as the work of laborers can be replaced with machines.
According to the Ministry of Industry and Trade, in 2019, the number of tractors across the country increased by about 48%, combine harvesters increased by 79% and agricultural dryers increased by 29%. The farm power availability reached about 2.4 HP/ha cultivated. However, Vietnam is still far behind the average level of equipment for agriculture when compared to Thailand with four HP/ha, China eight HP/ha, and Korea 10 HP/ha.
Row Crop Tractors Dominate the Market
With the rising unavailability of farm laborers and the growing farm mechanization of agriculture, the demand for row-crop tractors boosts the sales of the Vietnam agricultural machinery market. The increasing demand for low power under limited arable land, precision, handling, and efficiency has shaped the development of the modern planter tractor, and it continues to drive the development of these tractors.
The row-crop tractor is specifically tailored to grow crops that meet all agricultural demands, such as ploughing, harrowing, leveling, pulling seed drills, weed control, and running various machines, like water pumps, and belt pulley threshers. These tractors are provided with replaceable driving wheels of different tread widths. They have a high ground clearance to save crop damage. In terms of consumer preferences, sales for 4W tractors are growing faster than that of 2W but the latter has the dominant market share in terms of volume. The low price of two-wheel tractors makes them a great choice for small-hold farmers who own small pieces of land. Technological advancement for developing more efficient products, while keeping in mind the country-specific requirements, will provide opportunities for the future growth of the sector.
