“Earlier, tractors used to produce a maximum of about 100bhp, now we have tractors producing well over 500bhp, with some even going up to 750bhp! That is more powerful than some of the popular supercars we have around.”

Question 1. Before we start, can you please tell me how long you have been in this industry?

I have been with my current organization for 22 years since 2001, and before this I was with another agriculture equipment manufacturer for 20 years from 1981 to 2001. So it has now been 40+ years in this industry!

Question 2. What is the current stage of the agriculture equipment market in Italy?

The agriculture equipment market in Italy is currently in the growth stage, with regular breakthroughs in innovation and development. Tractors and combine harvesters are now becoming more and more powerful with high displacement engines producing even higher horsepower, and more farmers are expected to slowly but steadily adopt the use of these machines.

Question 3. How has the agriculture equipment market as a whole grown over the past 5 years from 2017 to 2022 and how is it poised to grow over the next 5 years, from 2023 to 2027?

Over the past 5 years from 2017 to 2022, the market has been through quite a few ups and downs, including the massive impact that the COVID-19 pandemic had. Overall, I can say that the market today is about 5% more than what it was in 2017. Assuming no other drastic natural, social or economic events take place in the next 5 years, we can safely assume that the market will see a steady uptick and will grow at least 10-11% more than what it is today.

Question 4. Is the market import driven or are the equipment produced domestically?

Italy is known for exporting its agricultural equipment to various countries, thanks to its reputation for producing high-quality machinery. All the major market players have domestic plants where they produce tractors, combine harvesters and rice transplanters and then sell those in Italy or export abroad. As far as I’m aware, Kubota is one of the only major companies whose products are imported.

Question 5. What are the historical and future growth rates for the Italian tractor market?

The tractor market is actually the most aligned with the overall agriculture machinery market in Italy due to the high revenue generated from the sale of tractors alone. So, the growth rate for the past 5 years for the tractor market was around 3.5-4% and in future it is expected to go up to around 10-11% like the overall market.

Question 6. Do rice transplanters exist in Italy?

In the rice fields of Northern Italy, there might be some remarkably ancient rice transplanters may still be in operation. Despite their age, they continue to serve their purpose diligently, showcasing the enduring craftsmanship of their bygone era. but these transplanters, they are not produced or sold in the country any more

Question 7. Are 2-wheel tractors used in Italy?

Yes, but it is a negligible percentage of the total number of tractors sold in the country. Approximately 70-80 tractors sold in the past year.

Question 8. Which are the major companies selling 2-wheeled tractors, and major companies selling 4-wheel tractors?

Very few companies sell 2-wheel tractors, so I think Massey Fergusson and New Holland have about 98% share in that market, and the remaining 2% belong to other players. In the 4-wheel tractor market, the biggest players are New Holland, Fendt, Massey Fergusson, John Deere, Kubota, Claas, Deutz-Fahr, etc.

Question 9. What are the historical and future growth rates for the Italian combine harvester market?

Combine harvesters are actually priced quite high per unit as compared to tractors, hence even if they sell in small numbers, they contribute a lot to the total revenue of the agriculture equipment industry. Historically over the past 5 years, the combine harvester market at a rate slightly higher than 10%, and in the forecasted period it is expected to grow around 15% from now.

Question 10. Which are the major regions in Italy where agriculture equipment such as tractors and combine harvesters are used?

The majority of the usage is in Central and Northern Italy, as they are considered to be the most agriculturally productive regions in the country. In fact, Emilia-Romagna in Northern Italy is often referred to as the "breadbasket of Italy" due to its extensive cultivation of cereals and other crops.

Question 11. Before we end this interview, what is the biggest change you have noticed in this industry since the time you started working in the 1980s to now?

It is astonishing how tractors have evolved over the years! Earlier, tractors used to produce a maximum of about 100bhp, now we have tractors producing well over 500bhp, with some even going up to 750bhp! That is more powerful than some of the popular supercars we have around. Also, when people think of tractors, they think of some barebones vehicle that is low on comfort and with rudimentary technology. On the other hand, high-end tractors nowadays have airconditioned cabins with touchscreen entertainment systems and what not. There have been a lot of innovations in this industry, but the society at large is unaware of it.

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Ankur Gupta, Director Strategy and Growth
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