Updated Nov 15, 2022 02:58

Tractor Market in Vietnam

Market Overview
In , the Vietnamese tractor market increased by % to $, rising for the second consecutive year after four years of decline. Over the period under review, consumption posted a strong increase. Over the period under review, the market reached the peak level at $ in 2015; however, from 2016 to , consumption failed to regain momentum.

In value terms, tractor production shrank rapidly to $ in estimated in export price. In general, production, however, enjoyed resilient growth. The growth pace was the most rapid in 2011 when the production volume increased by % against the previous year. Over the period under review, production hit record highs at $ in , and then dropped significantly in the following year.


Consumption
In , consumption of tractors increased by % to units, rising for the fourth consecutive year after three years of decline. Over the period under review, consumption continues to indicate resilient growth. As a result, consumption attained the peak volume of units. From 2012 to , the growth of the consumption failed to regain momentum.

The size of the tractor market in Vietnam rose modestly to $ in , surging by % against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers' margins, which will be included in the final consumer price). In general, consumption enjoyed prominent growth. Tractor consumption peaked at $ in 2015; however, from 2016 to , consumption remained at a lower figure.


Consumption by Type
Pedestrian-controlled tractors ( units) constituted the product with the largest volume of consumption, accounting for % of total volume. Moreover, pedestrian-controlled tractors exceeded the figures recorded for the second-largest type, road tractors for semi-trailers ( units), fivefold. The third position in this ranking was held by agricultural and forestry tractors ( units), with a % share.

From 2007 to , the average annual growth rate of the volume of pedestrian-controlled tractors consumptions amounted to +%. With regard to the other consumed products, the following average annual rates of growth were recorded: road tractors for semi-trailers (+% per year) and agricultural and forestry tractors (+% per year).

In value terms, road tractors for semi-trailers ($), pedestrian-controlled tractors ($) and agricultural and forestry tractors ($) constituted the products with the highest levels of market value in , together accounting for % of the total market.

Pedestrian-controlled tractors, with a CAGR of +%, recorded the highest growth rate of market size among the main consumed products over the period under review, while market for the other products experienced more modest paces of growth.


Market Forecast
Driven by increasing demand for tractor in Vietnam, the market is expected to continue an upward consumption trend over the next eight-year period. Market performance is forecast to decelerate, expanding with an anticipated CAGR of +% for the period from to , which is projected to bring the market volume to units by the end of .

In value terms, the market is forecast to increase with an anticipated CAGR of +% for the period from to , which is projected to bring the market value to $ (in nominal prices) by the end of .


Market Structure
Affected by an intensive growth in domestic production, which will gradually displace imported products from the market, the share of imports decreased from % in 2007 to % in . Vietnam domestic supply is expected to continue its growth. In , the share of imports in total consumption accounted for % in value terms and % in physical terms. The share of imports decreased moderately (- percentage point) over the period under review.


Trade Balance
Vietnam remains a net importer of tractor; in physical and value terms, imports consistently exceeded exports from 2007 to . In , there was a significant trade deficit of units, which was equal to $. This tangible trade deficit reflects the fact that the market remains dependent on imports, which is likely to continue in the medium term.