The worldwide COVID-19 outbreak is projected to hurt major manufacturers. Pandemic restrictions will push market players to lobby to the governments to designate agriculture equipment production as essential business to minimize losses in the near term.
DUBAI, UAE / ACCESSWIRE / June 17, 2020 / The massive impact and threat to mortality from the COVID-19 virus is hurting the production of agricultural equipment. Further, the crippling impact of the disease on the global economy and shortage of labor in farming operations has pushed small and medium scale agriculture equipment manufacturers to the brink of shutting down, while large scale producers are hit by major losses.
Despite the threat of the outbreak, the agricultural equipment market is expected cross a valuation of US$ 62 Bn by the end of 2020. Rapid innovations in artificial intelligence, automated driving, and electrification of equipment will help in partially mitigating the threat of the coronavirus till the pandemic is brought under control.
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“Rapidly increasing numbers of COVID-19 cases is restricting the agricultural equipment industry, which is expected to struggle with higher production costs and the continuing impacts of the U.S. – China trade war. The strong requirement of workplace safety and the maintenance of operations are key concerns. The trend of widespread economic shutdowns and sudden stoppage of production will also impact demand for agricultural equipment. The industry should start recovering towards the fourth quarter of 2020, before resurging in 2021” states the FMI analyst.
Agricultural Equipment Market- Critical Takeaways
- Tractors are projected to be a major contributor to market revenue owing to wide range of standalone and tandem farming applications.
- Harvester vehicles will find remunerative opportunities owing to the reduced dependence on human labor for farming operations.
- Seed bed preparation and land development applications will hold the lion’s share of the agricultural equipment industry, owing to shortage and high cost of human labor.
- Harvesting and threshing applications are gaining traction with the advances made in automation technologies.
- Asia Pacific remains a dominant market owing to low mechanization in agriculture and wide spread of agricultural land.
Agricultural Equipment Market- Drivers
- Massive global demand for food and adoption of modern tech by the farming community are key growth drivers.
- Higher crop output and quality from advanced farming machinery contributes to market developments.
- Rapid integration of technologies such as GPS and artificial intelligence in product offerings will support market growth.
- Significant rise in funding for yield improvement and reduction of labor costs helps market growth.
Agricultural Equipment Market- Restraints
- The high costs associated with the development of new features and products is a key challenge for market players.
- Lack of adequately skilled operators for new farming equipment remains an obstacle to market development.
Coronavirus Impact on Agricultural Equipment Market
With the number of coronavirus cases continuing to rise strongly in many countries, concerns associated with logistics and labor shortages in the agriculture market grows strongly. In addition, the slump in construction and mining activities has also hit the leading agriculture equipment manufacturers.
Currently, there is a strong need for financial and policy support for the industry from regional governments, without which a number of small and medium scale businesses in the industry are unlikely to survive. Consequently, the COVID-19 pandemic is widely viewed as a major obstacle to the market.
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Some of the prominent players in the agricultural equipment market include Kubota, John Deere, Iseki & Co. Ltd., AGCO, CNH Industrial N.V., and Mahindra & Mahindra. Major manufacturers in the moderately consolidated agricultural equipment market are investing in product quality, availability, and tech innovations. Also, strategic mergers and acquisitions are key to business models in the industry.
For instance, John Deere launched its new, X-series combine, which the company claims to be equipped with a new dual threshing system. Further, AGCO has started to incorporate AR and VR training for worker training to improve productivity in a shorter period.
About the Study
The study offers an in-depth projection of the agricultural equipment market. Global, regional and national-level analysis of the latest trends influencing the agricultural equipment market is covered in this FMI report. The study provides insights according to product type (tractors, rotavators, threshers & dehuskers, power tillers, power weeder, plough, baler, and seed drill), category (tractor pulled/attachment, and self-propelled), ownership (individual and rental), in six regions (North America, Latin America, Europe, East Asia, South Asia & Pacific, and MEA).
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