North American Farm Tractors and Self-Propelled Combine Harvesters Markets

Abstract

Participants in the Farm Tractors and Self-propelled Combine Harvesters Markets Must Offer Competitive Prices as Competition Heightens

Enterprises in the mature North American markets for farm tractors and self-propelled combine harvesters are facing the challenge of maintaining their market position due to the stiff competition from the current market participants. Manufacturers need to come out with wider product ranges at highly competitive prices and provide comprehensive customer service approach and superior technical expertise and quality. Expanding their geographic coverage and installing reliable distribution networks to meet demands is also expected to help participants in sustaining revenue growth.

This Frost & Sullivan research service provides an overview of and an outlook for the North American farm tractors and self-propelled combine harvesters markets, detailing revenue forecasts by region and segments as well as providing market share analyses. It looks into the major categories of tractors based on horsepower (hp) -- low, medium, and high. This information is valuable for both large and small market participants seeking to position themselves for maximum return on investment.

Rising Commodity Prices Steer Market Revenues Upward

The North American farm tractors market depends heavily on developments in the agriculture sectors. Since 2001, farms in the region have been enjoying ascending commodity prices. "For instance, the prices of both soybean and corn have increased more than two-folds from 2003-2004," points out the analyst of this research service. "Such hikes have been mainly due to rising demand from the Asia Pacific region (especially China) and the continuous depreciation of the U.S. Dollar against major global currencies."

An upward swing in the commodity prices has increased farmers power to purchase combine harvesters and tractors. Manufacturers of these equipments thus need to step up their promotional activities to convince farmers to buy performance-enhancing machinery.

Fast Multiplying Hobby Farms Propel Demand for Low- and Medium-Horsepower Tractors

"There has been an increase in the demand for low- and medium-horsepower tractors from a new set of consumers called hobby farmers or sundowners," notes the analyst. Hobby farmers are not farmers by profession and they earn their livelihood through other channels. They spend around 100-200 hours a year in farming as against 1000-2000 hours spent by the regular farmers.

At present, the hobby-farming segment is 60,000-80,000 units strong, comprising of tractors with capacity below 70 horsepower and experiencing an annual growth of 8.0 to 15.0 percent. As the North American economy continues its ascent and the cash flow surges up, the demand for low- and medium-horsepower tractors is likely to rise. In addition, the conversion of mid-sized farms into either small, part-time ones or larger ones is further set to propel the farm tractors market.