Global sales of agriculture equipment totalled 5,600 thousand units in 2016, representing a market value of over US$ 100 billion. Agriculture equipment sales are anticipated to increase at a CAGR of 2.8% to reach 6,960 thousand units by 2026.
New York City, NY -- (SBWIRE) -- 06/22/2017 -- Asia Pacific continues to be the largest market for agriculture equipment, with nearly 2,669 thousand units sold in 2015. North America is the other leading market for agriculture equipment.
The key factors fuelling demand for agricultural equipment include,
Steadily increasing demand for food remains a key macro factor impacting the sales of agricultural equipment. The world population is projected to increase at over 30% by 2050. This is putting pressure on governments to improve agriculture production mechanisms.
Government incentives and investment schemes remain a key factor for growth, as offering sops to farmers in resource-intensive countries. For example, in India, Rashtriya Krishi Vikas Yojana is supporting farmers to purchase agricultural equipment at subsidised rates.
Even in conservative societies, a paradigm shift from manual to professional based agricultural work is being observed. This is contributing to increased demand for agricultural equipment.
Although the global agricultural market is anticipated to witness a steady growth, it is expected that inflation in power and fuel rates can stifle growth. Further, overproduction of commodities can negatively impact the growth of the market.
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The key trends shaping the global market for agricultural equipment include,
Emergence of contract farming and dedicated sourcing with corporate partnership
Mechanisation of equipment – tractors are being manufactured with advanced technologies, such as GPS and antenna. Buyers are looking for smart equipment, as there is an overall push toward technologically advanced equipment.
Broadly, agricultural equipment can be categorised into,
Among these, tractors remain the highest selling agricultural equipment, with nearly 2,295 thousand units sold in 2016. Tractors are projected to remain the most lucrative product-type segment, growing at a CAGR of 2.8% through 2024.
APAC is home to world's two most populous countries. China and India are making the shift from an agricultural society to one which is service-oriented. However, a sizeable section of population in these two countries are dependent on agriculture as a profession. Steady demand from this demographic is a key contributor to the growth of the agricultural equipment market.
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The China agricultural equipment market was valued at over US$ 8 billion in 2016. It is projected to increase at a CAGR of nearly 3.5% during 2016-2024 and reach nearly US$ 11 billion in revenues. The market in India is expected to be driven by favorable government policies.
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Leading companies in the global agricultural equipment market include, Kubota Corporation, CLAAS KGaA mbH, Mahindra & Mahindra Ltd., AGCO Corp, Deere & Company, EXEL Industries, SDF S.p.A, Tractor and Farm Equipment Limited, ISEKI & CO. LTD., CNH Industrial N.V., and Bucher Industries AG.