Top 3 Drivers for the Global Tractor Transmission System Market | Technavio

Technavio market research analysts forecast the global tractor transmission system market to grow at a CAGR of close to 3% during the forecast period, according to their latest report.

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Technavio has published a new report on the global tractor transmission system market from 2017-2021 ...

Technavio has published a new report on the global tractor transmission system market from 2017-2021. (Graphic: Business Wire)

The report further segments the global tractor transmission system market by wheel drive (two-wheel drive and all-wheel drive) and by geography (APAC, the Americas, and EMEA).

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Technavio analysts highlight the following three market drivers that are contributing to the growth of the global tractor transmission system market:

  • Increasing labor wages
  • Increasing investment in agricultural equipment and machinery
  • Growing focus on agricultural sector by governments and private players

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Increasing labor wages

A continuous increase in the minimum labor wages has been witnessed across all regions. It has resulted in an increase in the cost of production of the crops. Therefore, it has reduced the farmer's profitability. APAC countries such as India and China are experiencing a rise in the minimum wage of agricultural laborers due to government intervention. The Indian government has increased the daily wages of unskilled agricultural laborers in 2016. This has resulted in the farmers employing a restricted number of laborers as they are keener to be less dependent on the laborers. This has led to them investing in machines, farming equipment, and tractors to substitute for manual labor.

According to Raj Gaurav Singh, a lead analyst at Technavio for automotive components research, “Owing to the increasing labor wages, farmers are investing more in farm equipment and machinery. Investing in farm equipment and machinery will increase the sales of tractors because most of the farm equipment and machinery is pulled or driven by tractors. Therefore, the rise in the labor wages will promote more sales of tractors, and eventually, drive the tractor transmission system market.”

Increasing investment in agricultural equipment and machinery

The agricultural equipment and farm machinery are used by the farmers in agricultural lands to increase the productivity of the crop. It also helps in reducing the time and energy for cultivating the crops. Additionally, the increasing labor wage has resulted in the farmers investing in farm equipment and machinery to reduce the dependence on manual labor. Agricultural equipment and farm machinery such as a plow, subsoiler, harvesting machinery, haying machinery, cultivators and, tractors, are in high demand due to their innovative new features and technical advancements.

“The agricultural equipment and farm machinery market is growing due to increasing focus on improving the farm productivity and minimizing the operational hour and cost. Besides, the rise in the per capita income, especially in the APAC region, will lead to more demand for agricultural equipment and farm machinery during the forecast period,” says Raj.

Growing focus on agricultural sector by governments and private players

The growing global population and advancement in the field of modern farming techniques are the factors driving the global agriculture industry. Economies are focusing on developing their agricultural output by increasing the farm productivity.

Furthermore, the governments of various economies are taking various initiatives for encouraging farmers to use modern techniques of farming and increase their productivity. For instance, the Indian government has eliminated the excise duty on low-powered tractors for encouraging farmers to purchase the same.

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