Asia-Pacific Agricultural Machinery Market

The Asia Pacific represents a large segment of the developing countries’ agricultural area, consisting of a large proportion of small holding farmers. This market is thus characterized by a number of regional body interventions (ADB, UN bodies, and others), close tracking, social enterprises and monetary aid. In comparison with about 700-1850 tractors used per 1000 farmers in North America or Europe, the countries in Asia-Pacific (China, India, others), and Africa, exhibit poor rates of 3-6 tractors per1000 farmers. However, initiatives to remedy this disparity are underway, by governmental, regional bodies and others. Consequently, there is a thriving market for equipment rental market in some countries, and a growing equipment purchase market.

Out of the global demand for agricultural machinery, Asia Pacific alone provides half of the demand. It is thus of little surprise that this high growth region is also one of the fastest growing in terms of agricultural machinery and implements. There is an active regional agricultural machinery testing program driven by UN in the Asia-Pacific.

Currently worth $ X billion, this market is projected to grow at CAGR 15.8% over 2015-2020. The growth is driven in large part by an increase in affluence, and thereby, consolidation in agricultural areas in the Asia Pacific, demand for higher productivity to match the demand for more food in line with a growing population. In addition, technology advancements, to match not only large scale productions as in the west, but to support and fit the needs of small holder farmers is also expected to drive the growth of this market.

Most important constraints faced by this market in the Asia Pacific include lack of awareness about new technologies, lack of skilled manpower, fluctuating prices of farm commodities, lack of governmental support, and lack of purchasing power due to a low average level of affluence.

Starting with common tools of farming like plough and sickle, the agricultural machinery industry has products to offer in every stage of a crop cycle. Here market segmentation is done on the basis of product and phase type, for example, tractors, plowing and cultivating machinery, planting and fertilizing, harvesting machinery etc. The combine machine of scarifying, fertilizing and seeding is popular in Asia-Pacific; the plough, mineral fertilizer applicator, combine harvester and grain thresher are also in great demand. Large ticket items like tractors and harvesters is dominated by foreign manufacturers, and does not pose a direct threat to the small and medium sized implements manufacturers in the country.

While Japan has the highest level of mechanization among Asian countries, regionally India and China provide great scope of growth due to continued support from government bodies. Countries such as Thailand and Vietnam also exhibit great potential for growth. The equipment used in these countries tend to be in the form of smaller horsepower, low-technology tractors with relatively low unit prices.

Competitive Landscape

The Asian agricultural machinery and equipment industry is dominated by renowned players like Deere and Company, AGCO Corp., CNH Industrial N.V, Iseki & Co. Ltd., Kuhn Group, Kverneland Group and Escorts Group operating in market place. Changzhou Dongfeng Agricultural Machinery Group, China National Machinery Industry Corporation, Daedong Industrial Company Limited, Foton Lovol , Yanmar Company Limited , Shandong Shifeng Group Company Limited are some of the Asian companies operating specifically in the region. The companies here strive to strengthen their base through of product features, pricing, quality, scale of operation and technology innovation.

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