The global agricultural tractor market demand was valued at 2,942.8 thousand units in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 6.9% from 2023 to 2030. The increase in demand for compact tractors on small farms and technical developments such as the integration of telematics with agricultural tractors are expected to drive growth. Furthermore, the quick adoption of mechanization is expected to be favorable for the market's expansion during the following eight years. Additionally, it is anticipated that the market will witness growth due to the migration of farm workers to cities, which would result in a labor shortage. Due to the brief production halt and supply chain disruption caused by the COVID-19 outbreak, product demand was impeded.

However, in H1 2022, the demand for tractors bounced back significantly with double-digit growth in major economies, such as the U.S., Canada, the U.K., Germany, China, and India. Also, strong crop production in these markets, along with the need to replace aging equipment, increased product sales in H1 2022. However, a sudden increase in demand led to lower inventory levels of tractors in H2 2022, a trend expected to continue over the next few quarters of 2022. In 2022, OEMs are presumed to increase agricultural tractor prices from 4% to 22%, which is anticipated to slow down the market growth. It is attributed to low inventory levels of tractors experienced by dealers.

The less than 40 HP segment accounted for more than 62.14% market share in terms of volume in 2022. The high growth can be attributed to the low cost, compact size, and greater convenience offered by less than 40HP tractors to perform all basic farming operations. These equipment are adopted mainly in the Asia Pacific region, where approximately 85% of farmlands are below 10 hectares and are preferred by most farmers in the region. In addition, the electrification of tractors in the less than 40 HP segment is expected to gain momentum over the next few years.

Europe is expected to grow at a moderate CAGR in terms of volume over the next few quarters in 2023. The growth is attributed to the increased demand for large farm tractors, particularly from Italy, Greece, and Lithuania. In addition, the high demand for autonomous tractors is expected to drive regional market growth over the forecast period. On the other hand, a long waiting period for new tractor purchases due to production delays is expected to hamper the market growth over the forecast period.