The Vietnamese Agricultural Machinery Market is projected to register a CAGR of 13.1% during the forecast period (2019-2024). The factors that are driving this market are population growth, urbanization and higher productivity demand with the shrinking agricultural land, which have led to the growth in demand for agricultural machinery. Rice, maize, and sugarcane are the most cultivated crops, with rice being the most mechanized crop. Most than 70% of the cultivated area under Vietnam is mechanized. To make these expensive machinery affordable by farmers, the government is implanting supporting schemes. This is one of the major factors driving the growth of the market. Custom hiring of agriculture machinery can be observed in Vietnam as the local production of agriculture machinery is low. Agricultural co-operatives and private enterprises are the providers of machinery for hire. Organizations that offer hiring services have efficient machinery in tillage, harvesting, threshing, drying, storage of grains, and transportation. These organizations are concentrated especially in Mekong River Delta and Red River Delta.
Scope of the Report
Agricultural machinery includes harvesting machinery, tractors, sprayer, transplanter, tractor implements and irrigation system among others. The market studied has been segmented by different types of agricultural machinery.
Key Market Trends
Shortage of Seasonal Agricultural Labor
Though agricultural wages are low and the lifestyle of laborers in industrial background is poor, people prefer industrial jobs over agriculture, as the agricultural production in Vietnam is on the decline. This situation is leading to a shortage of agriculture labor in Vietnam, during the farming season. Shortage of seasonal agriculture labor is the major driver for the implementation of machinery in agriculture, as the work of laborers can be replaced with machines.
Tractors Dominate the Vietnam Agricultural Machinery Market
The tractor segment is the major segment of the Vietnamese agricultural machinery market and accounts for nearly half of the market share. The segment was valued at USD 40.9 million in 2018 and is projected to register a CAGR of 11.5% during the forecast period. According to IFPRI, in 2016, there total of 532,600 tractors, among which 294,600 were two-wheel tractors with less 15 HP; 221,300 were four-wheel tractors with 15-35 HP; and 16,700 were four-wheel tractors with more than 35 HP. Technological advancement for developing more efficient products, while keeping in mind the country-specific requirements, will provide opportunities for the future growth of the sector.
The Vietnamese agricultural machinery market is ready for investment and various companies are adopting different strategies to increase their market presence in this market in Vietnam. Kubota, CNH, and VEAM are the largest companies that provide combine harvesters in the Vietnamese agricultural machinery market. VEAM is the largest domestic supplier for tractors in Vietnam, Thaco recently opened a new plant in Vietnam, with the aim of increasing its domestic market share in agricultural machinery. Kubota is the largest manufacturer and distributor of rice transplanters in Vietnam. Local companies like HAMCO and Viện cơ điện nông nghiệp và Công nghệ sau thu hoạch (VIAEP) are very popular among farmers in Vietnam as these companies rely more upon direct sales rather than distributing products through agents and third-party distributors.