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Ag Machinery Market To Continue Growing
VIETNAM REPORT
Akihiro Komuro The Vietnamese agricultural machinery market is expected to grow steadily over the forecast period due to labor shortages in rural areas and rising demand for mechanization. Efforts to improve rice production are boosting demand for agricultural machinery, especially small tractors and tillers. Japanese brands like Kubota and Yanmar maintain a strong market position, but Chinese competitors are increasing their presence. Small-scale farmers consider initial costs, durability, and after-sales service when making purchases. Government policies aimed at modernization are also supporting market growth.
Source: Mordor Intelligence
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Agritechnica 2025: The Rise of Smart, Hybrid Efficiency
Emiliano Marzoli The Agritechnica 2025 trade show, held under the guiding theme “Touch Smart Efficiency,” cemented the industry’s focus on integrating digital intelligence with advanced hardware to achieve higher yields while ensuring environmental and economic sustainability. The primary trend was the transition of alternative power and robotics from concepts into commercially available, high-performance machinery.
The 2025 show was bigger than the previous show in 2023–there were more attendees (476,000 vs. 470,000) and exhibitors (2849 vs 2812) and more countries represented (171 vs. 149). The total space for the two shows was the same–394,000 sq in 24 halls at the Hanover Exhibition Center in Hanover, Germany. The bi-annual show ran Nov. 9-15.
Key New Models and Technology Unveiled
Manufacturers focused heavily on hybridization, automation, and engine efficiency: -
Mahindra Starts Construction of AG Equipment Plant
Fabio Ferraresi Mahindra Brazil has started construction of its new manufacturing facility in Dois Irmãos (RS), supported by an investment of around US$ 17.5 million over five years. The new plant will cover 89,000 m², with 38,568 m² built and an expansion potential of 24,000 m², tripling production capacity from 3,000 to 9,000 tractors per year. The project is expected to create about 300 direct and indirect jobs and marks Mahindra’s transition toward a more localized industrial base in Brazil.
Source:…
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New GST Is Game Changer for Autos, Tractors
Aditya Kondejkar The September 2025 GST Council meeting introduced sweeping tax revisions that significantly lower GST rates across multiple vehicle and farm equipment categories. Tractors and their components now attract a 5% rate (from 12% for standard tractors, and from 18% for parts), while small cars, two-wheelers (up to 350cc), three-wheelers, buses, and certain commercial vehicles are enjoying reduced GST from 28% to 18%.
These changes are expected to improve affordability, stimulate demand (especially in rural and semi-urban areas), boost manufacturing and ancillary industries, and lead to job growth across the value chain.
Source: The Times of India. Read The Link
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Europe Agricultural Machinery Business Sees Dip
The European agricultural machinery industry’s business climate index slightly dropped for the second consecutive month, reaching 0 points in July from +4. This decline primarily affected arable equipment, transportation, and components, unlike previous months when harvesting equipment and tractors saw deterioration.
Market confidence remains low in France, particularly for tractors, arable, and harvesting equipment, with Germany also performing poorly in these segments. Conversely, Spain, Poland, and the UK show strong confidence, leading the European market.
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Brazil May Surpass Europe in Ag Machinery Sales
Fabio Ferraresi Deere & Company estimates that Brazil will become its second-largest global market within the next five to ten years, surpassing Europe in sales of tractors, harvesters, and other agricultural equipment.
The forecast is based on the expansion of Brazilian agricultural production, particularly soybeans, corn, and sugarcane. According to Cristiano Correia, Vice President of Production Systems for Latin America, “no other region shows a compound growth rate in grain production comparable to Brazil’s over the next decade.”
The Illinois-based company is holding its first Investor Day in Brazil in over a decade in 2025, gathering around 40 investors from North America, Europe, and Asia.
Deere projects a 27% increase in Brazil’s planted grain area by 2035 and expects corn-based ethanol production to double during the same period.
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Farm Mechanization Unlocks Productivity
Farm mechanization in India is steadily evolving from being tractor-centric to encompassing a broader range of machines and technologies aimed at improving agricultural productivity and efficiency. Traditionally, mechanization was equated with the use of tractors, which replaced bullocks in tillage, sowing, and transport operations. The tractor gave Indian farmers a reliable source of power, allowing them to perform heavier and faster field tasks.
A typical pair of bullocks generates just about 1 horsepower (hp), while most tractors sold in India today are in the 41–50 hp range. With nearly 9 lakh units sold annually, tractors form the backbone of India’s farm power economy, contributing over ₹60,000 crore in value terms. Yet, the real shift lies in the rising demand for tractor-mounted and self-propelled farm machinery, driven by the need to overcome agricultural labor shortages and improve overall farm economics.
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Kubota Plans Tractor Plant in India, Doubling Production
Akihiro Komuro Kubota plans to build a tractor factory in India, open that will be operational by 2030. The investment is expected to be in the tens of billions of yen. The annual production volume will be increased to approximately 240,000 units, double the current volume.
India accounts for about half of the global tractor market in terms of volume, but Kubota’s market share in the country is only about 25%. The company aims to increase sales by developing new products in cooperation with the local manufacturer it has acquired.
Currently, it produces about 120,000 units a year at three factories, including Escorts, which it acquired in April 2022 for about $953,020,000 USD (140 billion yen). Its production capacity is 170,000 to 180,000 units, but it is expected to fall short of that in the next five years.
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