Exploring the European Tractor Market: Demand and Future Outlook
Although tractor demand in Europe is slowing, there are early signs of recovery. In this article, we explore the causes behind the downturn, the technological innovations shaping the sector, and the forecasts for the coming months in the agri-mechanical market. Keep reading!
It’s no secret that the agricultural tractor market has been facing a period of stagnation, despite some faint signals of recovery. To fully understand the current scenario and what lies ahead, we need to take a step back.Between 2021 and 2024, the European agri-mechanical sector went through its sharpest downturn since the financial crisis. In fact, 2024 marked the weakest year in terms of registrations, with just 204,500 vehicles classified as “tractors” entering the EU+EFTA registers. Of these, only 144,400 were genuine agricultural tractors, while the rest included quads, utility vehicles, and telehandlers, machines that are valuable, but not strictly designed for field work.
The 2021–2025 Agri-Mechanical Cycle
The booming year of 2021 seemed to signal a golden decade ahead for tractor manufacturers: soaring commodity prices, abundant liquidity, and generous post-Covid national incentive schemes. Yet the cycle quickly reversed. Agricultural prices, which peaked at historic highs in 2022, fell back, while production costs, including diesel, electricity, and fertilizers, climbed steeply, eroding margins more than in the previous five-year period. The restrictive monetary policy of 2023–2024 also played its part, making financing more expensive and limiting access to credit for purchasing machinery, just as farm budgets were shrinking. Climate events added further pressure: floods in Northwestern Europe and droughts in the Southeast reduced both yields and cultivable land. As a result, many farmers postponed purchases, choosing instead to repair existing machinery, buy used equipment, or simply wait.
Why Tractor Sales Matter
Selling a new tractor does not just benefit manufacturers’ balance sheets. The tractor is the beating heart of every farm, and tracking demand is crucial to understanding investment cycles, often postponed when margins are tight. Each registration generates a ripple effect across the value chain, stimulating sales of implements, services, spare parts, and fuel. Moreover, tractor registrations are a strategic industrial indicator for countries such as Italy, Germany, France, and Turkey, where the sector employs thousands, drives exports, and sustains component suppliers. EU registration data, therefore, is not only a snapshot of brand performance but also a predictor of employment, trade, and investment.
European Tractor Demand: The 2023–2024 Decline
Between 2023 and 2024, European registrations of agricultural tractors fell from 157,147 to 144,400 units (-8.1%), the lowest figure in the last decade. Since 2021, the market has lost nearly 38,000 machines (-20%). The decline, however, has not been uniform. Portugal, Spain, Belgium, and Greece all reported growth, while France and Germany, the two industry giants, together lost more than 2,900 units.
Compact Tractors and High Horsepower Models Outperform Mid-Range
In 2024, registrations dropped across almost all horsepower classes. Yet compact tractors and high-powered models bucked the trend. Tractors above 250 HP grew by almost 20% compared to 2023, raising their share from 7% to 9% of the European market. By contrast, mid-range tractors, especially those between 80–130 HP, recorded double-digit declines.
Country-by-Country Overview
- Portugal, Spain, Belgium, and Greece: the only markets closing 2024 on a positive note. Portugal led with +25.4%, followed by Spain and Belgium (both above +13%) and Greece (+5.4%).
- France and Germany: both down, though less than 10%.
- Balkans, Estonia, Latvia, and Iceland: sharp declines above 20%.
Focus on Key Markets
Italy: Third Year of Decline for New Tractors
According to FederUnacoma, 2024 saw just over 15,400 new tractor registrations in Italy, down -12.2% year-on-year. The only growing segment was below 25 HP, which rose by +19%. Meanwhile, the used tractor market continued to expand (+8% vs. 2023), with over 57,000 units traded, evidence of rising demand for more affordable solutions.
Germany: A Drop of Over 1,200 Units
German registrations fell -4.4% in 2024, slipping below 27,600 units. Models under 150 HP recorded the steepest declines, while tractors above 150 HP ended the year slightly up.
France: Gardening Up, Agriculture Down
For the first time, France fell below 34,000 registrations (-5% year-on-year). Standard tractors dropped -8.4%, and specialized tractors recorded their lowest level in a decade (-24.6%).
The exceptions: gardening tractors (+9%) and high-powered machines above 300 HP (+13%). Average horsepower also climbed from 163.5 to 169 HP.
The downturn is closely linked to an 8% drop in agricultural output value, with cereal and wine producers particularly hard hit (-21.7% and -20% respectively).
United Kingdom: Low Overall, High Horsepower Rises
The UK market shrank -11.7%, slipping below 12,000 units for the first time since 2020. Yet high-horsepower models performed strongly: tractors above 240 HP grew +14%, pushing average power to 180 HP, a new record. The slowdown was driven by reduced subsidies, fiscal reforms, high production costs, commodity volatility, and unfavorable weather.
Spain: Surge in Tractors Above 100 HP
Spain grew +13.4% in 2024, surpassing 8,700 units. Growth was strongest in tractors above 100 HP, with models over 200 HP up +26%. The used market also expanded, confirming a steady trend toward cost-effective alternatives.
Turkey: A Steep Contraction
Turkey, though not included in EU aggregates, is a major market with over 63,500 units registered in 2024. This represented an -18% fall compared to 2023.
The drop reflects worsening farmer economics, declining crop prices, limited access to credit, and high inflation, all of which hit both domestic demand and export competitiveness.
Outlook for 2025 and Forecasts for 2026
So what lies ahead?
In 2025, the European tractor market shows signs of stabilization, with registrations projected at around 146,000 units, slightly above 2024. Favorable weather conditions and slower growth in energy costs are helping to restore balance. In Italy, about 16,000 new registrations are expected in 2025 (+4% vs. 2024). Confidence is also rising across Europe. CEMA’s Business Climate Index has moved from -11 in February 2025 to +2 in April, back into positive territory for the first time since mid-2023. Dealers report declining stock levels, now below the three-year average across all major European markets, another encouraging sign. Globally, optimism is returning, not just in key EU countries like Poland, Spain, and Italy, but also in overseas markets, particularly South America. For 2025 overall, sector players surveyed by CEMA expect moderate revenue growth of around +3%.
