XCMG Group of Friedrichshafen, Germany, and ZF Group have signed a joint venture agreement to establish “ZF (Xuzhou) Machinery Co., Ltd.”, headquartered in Xuzhou Economic and Technological Development Zone, Jiangsu Province.
In 2024, ZF expressed its plan to localize the production of power shift transmissions in China. With this joint venture, we see a collaboration that may be a technology transfer or a long term strategy to localize China’s high-end agricultural equipment.
China is the world’s largest manufacturer and user of agricultural machinery, but most of the agricultural machinery lack high-end R&D and manufacturing capabilities. This predicament of being “large but not strong” has reached a point where it must be addressed.
Source: 360trucks Read The Article
PSR Analysis. In 2014, when Zoomlion acquired Chery Heavy Industry and officially entered the agricultural machinery sector, to 2015 when the Xinjiang company of CRCC Heavy Industry was founded, 2016 when Liugong Agricultural Machinery Co., Ltd. was established, 2020 when XCMG set up Xuzhou Agricultural Equipment Technology Co., Ltd., and 2023 when Lingong built the Lingong Smart Agricultural Equipment Industrial Park in Lanshan District, Linyi, domestic construction machinery giants have been making constant layouts in the agricultural equipment sector in recent years.
Now, cross-sector entry into the agricultural machinery industry has become a mainstream trend in the industry. This move is by no means a hasty short-term capital speculation made by these enterprises. Instead, it is a strategic choice for construction machinery enterprises to rely on their profound core advantages accumulated in technology, manufacturing, channels and other aspects, achieve deep complementarity and two-way empowerment with the traditional agricultural machinery industry, and finally reach mutual benefit and win-win results.
Driven by intensifying competition and market saturation in recent years, many enterprises are seeking new growth points. Entering the agricultural machinery sector has undoubtedly become a key move for construction machinery firms to break through industry bottlenecks and open a second growth curve. The State Council recently released the 15th Five-Year Plan for Accelerating Agricultural and Rural Modernization, which clearly targets a comprehensive mechanization rate of over 80% for crop farming, harvesting and processing by 2030. It has rolled out clear supporting policies: pushing R&D of high-end intelligent agricultural machinery and models for hilly areas, fostering leading enterprises and specialized SMEs in the sector, promoting new-energy agricultural machinery development, and shifting farm machinery purchase subsidies from universal coverage to precise “superior product, superior subsidy” rules.
China now has the world’s largest agricultural machinery market. Data from CI Consulting shows the domestic market has topped $73.82 Billion USD (500 billion RMB) and is expected to reach around $103.35 Billion USD (700 billion yuan) by 2030 with a 5%-7% annual growth rate. The growth mainly comes from three parts: replacing old farm machinery, adding more high-end intelligent equipment, and filling the blank of machinery for hilly areas and special cash crops.
Exports are also rising fast: in the first quarter of 2026, China’s total exports of agricultural machinery and parts hit 5.94 billion US dollars, up 28.9% year on year, with complete machinery exports jumping 37.8% to 4.53 billion US dollars. New-energy farm machinery like hybrid tractors and electric tillers have also entered Southeast Asia and Central Asia in large batches, becoming a bright new spot for exports. PSR
Jack Hao is Senior Research Manager – China for Power Systems Research
