VIETNAM AGRICULTURAL MACHINERY MARKET

Vietnam Agricultural Machinery Market is estimated to attain a robust market growth rate and it is projected to grow at a double digit CAGR of 10.2% during the forecast period owing to the growing need for food, labor shortages, and government efforts to encourage farm mechanization.

Major Vietnam Agricultural Machinery/Equipment Market Drivers and Trends

Vietnam agricultural machinery market size is experiencing positive growth due to factors such as increasing food demand, heightened efforts to reduce post-harvest losses, labor shortages, extreme weather conditions, and the establishment of free trade deals with multiple nations. In addition, the promotion of farm mechanization by the government is driving efficiency improvements in crop production, cutting costs and saving time. Currently, there has been a trend where fragmented small-scale farms are consolidating into larger and centralized operations with a heightened emphasis on mechanization. With population growth and increased productivity amidst decreasing land, the need for agricultural machinery is anticipated to grow strongly in the foreseeable future.

Vietnam agricultural machinery market trends demonstrate moderate concentration, with few companies holding the largest market share. Leading players in the country implement strategies like launching new products, forming partnerships, and acquiring businesses. In addition to innovation and growth initiatives, investing in research and development to foster new product offerings is anticipated to be critical in upcoming strategies. 

However, despite a favorable market outlook, local machinery manufacturers in Vietnam have struggled to meet demand, with only 32% of the market supplied by domestic companies, as reported by the Vietnam Association of Mechanical Industry or VAMI. The remaining 68% are fulfilled by imported products mainly due to high demand and obsolete production technologies among local suppliers. Vietnam’s main sources of machinery imports are Asian countries such as Japan, South Korea, China, and Taiwan, which together supply roughly 70% of foreign machinery in the market driven by their competitive pricing and widespread consumer favor. ASEAN nations like Thailand, Indonesia, and Malaysia along with Western countries such as the United States, Germany, and Italy are also significant exporters to Vietnam. In addition to manufacturing and distribution activities in Vietnam, foreign equipment manufacturers can engage in technology transfer to local firms and offer custom hiring services in densely populated agricultural regions. Nevertheless, domestic enterprises are still crucial in this sector as they focus on direct sales instead of relying on agents and indirect sales channels. In addition, Vietnamese companies have a strong ability to comprehend and fulfill the demands of local farmers.

However, the considerable upfront costs and ongoing maintenance expenses of the advanced technologies may impact the profitability of agricultural businesses. Additionally, skilled personnel are essential to oversee and efficiently manage operations due to the complexity of modern agricultural machinery. The challenges farmers encounter in optimizing operations while managing productivity and costs are further complicated by concerns about the availability of skilled workers. Therefore, while modern farm machinery boosts productivity, the associated input and operational expenses underscore the importance of wise management and strategic investment decisions in agriculture.

Based on the product type, this market can be segmented into tractors, rice transplanter and implements, and combine harvester, with tractors dominate Vietnam agricultural machinery and equipment market share. Meanwhile, combine harvesters have experienced slow growth attributed to their higher costs. Leading machinery manufacturers are primarily concentrated in the southern and northern regions of the country, with the northern midland mountains having the lowest density of dealer stores.

Based on tractor segment, consumer preferences indicate that sales of 4W tractors are increasing at a faster rate than those of 2W, even though the latter maintains a larger market share by volume. Two-wheel tractors’ affordability makes them popular among smallholder farmers with limited land holdings.

Several notable players within the market include Kubota Corporation, Vietnam Engine and Agricultural Machinery Corporation or VEAM, Yanmar Vietnam, Iseki Corporation, among others.

Segments covered in the Report:

The Vietnam Agricultural Machinery Market has been segmented on the basis of Type. Based on the Type, the market is segmented into Tractors, Plowing and Cultivating Machinery, Planting Machinery, Harvesting Machinery, Haying and Forage Machinery, Others.

Market Segmentation

Vietnam Agricultural Machinery Market by Type

• • Tractors
  • Plowing and Cultivating Machinery
  • Planting Machinery
  • Harvesting Machinery
  • Haying and Forage Machinery
  • Others