When Agricultural Machinery Enterprises Stand at The Crossroads of Survival And Development

The achievements and progress made in China's agricultural machinery industry are evident to all. It has now developed into the world's largest manufacturer and user of agricultural machinery equipment, capable of independently manufacturing over 4000 types of agricultural machinery products covering 32 major categories, 72 subcategories, and more. It can meet more than 90% of the domestic market demand. The total power of agricultural machinery in China has reached 1.19 billion kilowatts, and the number of social agricultural machinery is about 200 million sets, with an original value of nearly one trillion yuan. The comprehensive mechanization level of crops has reached 76.7%, and the development of agricultural mechanization has entered an advanced stage. Agricultural machinery and equipment play a crucial supporting role in ensuring that China's grain production remains above 1.4 trillion catties for two consecutive years.

However, with the upgrading of industries and market changes, China's agricultural machinery and equipment industry is inevitably entering a period of adjustment and slowdown. Especially in recent years, the agricultural machinery market has continued its low-speed development trend, competition has become increasingly fierce, and the market reshuffle rate has accelerated. In particular, numerous traditional category agricultural machinery enterprises are facing even more severe survival tests.

We have asked more than once: what strategies should agricultural machinery enterprises adopt to "survive" and "live better" in the current era of multiple changes, when incremental contraction of enterprise brand competition enters a cruel close competition, when price competition of products is squeezed to the maximum extent, and when user purchasing demand becomes increasingly sluggish and sales are difficult to sustain?

1、 Coexistence of multiple pressures

The industry is in a slow cycle, and agricultural machinery enterprises face multiple pressures that affect their survival and development from different dimensions.

01 Quantity without profit

From the annual performance data statistics, in recent years, the overall revenue of the agricultural machinery industry has shown a stable and slightly increasing trend, but the industry's profit level has shown a significant gentle slope. In 2025, the overall profit of the industry will experience a slight decline, and the number of enterprise losses will continue to increase, accelerating brand elimination.

Especially for traditional agricultural machinery categories represented by tractors and harvesters, in the current situation of severe saturation of social stock and product supply, market competition has to enter a "close combat", and price wars have led to a gradual decline in industry average prices, severely squeezing profit margins. For example, the owner of a tractor company located in Weifang, known as the capital of tractors, said that it is difficult to guarantee the profits of tractors now. If a 804 tractor product earns 100 yuan, it must be shipped out. Otherwise, hesitation can easily lead to inventory backlog. Throughout the year, the company is busy and appears to have produced a lot of goods, but after careful calculation, it is not profitable.

In fact, in the context of a market downturn, this boss's situation is relatively good. Many second - and third tier brands in the agricultural machinery industry face enormous survival pressure and have even been gradually eliminated. Although the annual revenue data of the agricultural machinery industry seems to have slightly increased, the profit level continues to decline, and "quantity without profit" has become another label for the development of the industry in the past two years.

02 demand gap

View this phenomenon from two perspectives.

Firstly, the number of new users entering the agricultural machinery industry has decreased, and the demand for agricultural machinery is insufficient and clearly diverted. China's grain production has been abundant year by year, but the overall price of grain is not satisfactory. Planting grain does not make money, resulting in insufficient purchasing power of farmers and low enthusiasm for investing in agricultural machinery. At the same time, starting from 2023, China's livestock industry, which has only been thriving for a few years, has entered a downward cycle, leading to a significant decline in the livestock machinery industry. Moreover, the arduous labor and specific employment conditions in agricultural production have made many young people avoid it, and it has become commonplace for them to "rather go to the city to deliver takeout than engage in agriculture in the countryside". So, we have to face the reality that there is a gap in the demand for new agricultural machinery, and the renewal of existing agricultural machinery has become the main market increment unit.

Secondly, with the intensification of land use and the transformation of agricultural management models, the main users of agricultural machinery have shifted from "one household, one machine" to more socialized services, with an increase in large-scale operation scenarios and a clear trend towards large-scale agricultural machinery products. The demand for agricultural machinery products has been compressed, and higher requirements have been placed on product operation efficiency, reliability, intelligence, and other aspects. The iterative upgrading of traditional categories and innovative breakthroughs in emerging categories are imperative.

03 intensification of internal competition

There are numerous and scattered agricultural machinery and equipment enterprises in China, with serious product homogenization. Under fierce competition, the elimination of industry brands is accelerating, and the market pattern is showing a "double sky" of "ice and fire". Especially for traditional agricultural machinery categories, the trend of market share concentration towards the top is becoming more and more obvious, such as wheat harvesters, where the top selling brand has long occupied 60% of the market share; For example, tractors, the top two brands in terms of sales occupy over 50% of the market share; For example, corn harvesters, the top 5 brands in terms of sales account for over 70% of the market share. Against this backdrop, price competition is everywhere, with severe internal competition and intensified industry reshuffling. Small and medium-sized manufacturers and brands with insufficient competitiveness are accelerating their elimination.

The pressure on circulation enterprises in the agricultural machinery industry is as enormous as that on the manufacturing side, as the saying goes, 'One prospers, one suffers, and the other suffers.'. According to incomplete statistics, by 2025, over 60% of agricultural machinery dealers will experience a decline in revenue and shrinking profits, especially the top dealers with considerable scale in the region, who will face the dual pressure of inventory pressure and capital occupation from manufacturing enterprises. It is evident that in the context of the industry downturn, sales channels are under significant pressure.

The situation faced by agricultural machinery enterprises is the same, with reduced demand, decreased purchases, and insufficient market growth. How to make efforts in the replacement and update of social agricultural machinery stock? How to focus on meeting user needs? How to make efforts in product innovation and competitiveness enhancement? Whoever seizes the key points has a greater chance of winning the competition.

2、 The market is not good, but opportunities still exist

Fundamentally speaking, China's agricultural machinery and equipment industry started relatively late, and it was not until 2003 after the founding of the People's Republic of China that the basic scale accumulation was completed. Since the implementation of the national agricultural machinery purchase subsidy policy in 2004, with the dual effects of policy assistance and user demand, a "golden decade" of leapfrog development has been ushered in. The annual growth rate of the industry has remained in double digits, and the annual profit level ranks among the top three in the machinery industry. The domestic agricultural machinery industry has developed rapidly, and the supply of agricultural machinery products has been effectively met.

Since 2015, under the joint action of supply side structural reform and industrial development cycle, the agricultural machinery industry has entered a stage of upgrading and adjustment, and the main tone of development has shifted from scale growth to high-quality growth. Industrial upgrading and filling in shortcomings have become the main tone of development. The market operation rate has slowed down, and in 2018, there was a slight increase in industrial scale and negative growth in profits, creating the lowest point in industrial development in nearly 20 years. After experiencing a 3-year epidemic period, in 2022, the "upgrading from National III to National IV" of power machinery resulted in sales overdraft. From 2023 to 2025, the market operation will continue to decline. The competition between enterprises has become more intense and tends to be white hot. Some enterprises that mainly focus on low-end traditional agricultural machinery products have reached the brink of loss or extinction.

01 Policy dividend

The agricultural machinery and equipment industry has always been one of the national strategic priorities. For many years, the No. 1 central document of the Central Committee of the Communist Party of China has continued to focus on "agriculture, rural areas and farmers", and agricultural mechanization has attracted national attention. The central agricultural machinery purchase subsidy policy since 2004 has effectively driven industrial progress and development. It can be said with certainty that policy dividends are still the most significant positive factor facing the agricultural machinery and equipment industry, both now and in the future.

02 Technological Revolution

The current era is an era of innovation and digital reconstruction of social forms. With the continuous emergence of "major events" such as tractor power shift upgrades, heavy-duty tractor iterations, breakthroughs in grain direct harvesting models of combine harvesters, and the complete breaking of the monopoly of domestic cotton harvesters by Europe and America, we can truly feel that the era of technological revolution and innovation belonging to the agricultural machinery and equipment industry has arrived.

Progress has been made in the localization of green new energy, hybrid power, intelligent hydraulic systems, etc., accelerating the cross domain speed of industries and enhancing the resilience of industrial chains. All technological elements such as AI big data models, Beidou navigation, intelligent driving, and smart agriculture are jointly shaping a new stage of intelligence in the agricultural machinery industry. The domestic agricultural machinery and equipment industry is ushering in an opportunity period of technological revolution, and the future market will definitely belong to enterprises and brands with technological innovation capabilities.

3、 How can I take the road ahead?

According to the Global Agricultural Equipment Market Report (2026-2034) released by IMARC Group, the global agricultural equipment market is entering a medium - to long-term growth cycle with strong certainty. The report points out that the global market size has reached 188.8 billion US dollars by 2025 and is expected to grow to 264.6 billion US dollars by 2034, with a compound annual growth rate (CAGR) of 3.82% from 2026 to 2034.

Focusing on the domestic market, according to the "15th Five Year Plan for Accelerating Agricultural and Rural Modernization" released by the State Council and the latest industry policies, the future development of agricultural machinery will focus on four core directions: intelligence, greenness, applicability, and high-end. The goal is to achieve a comprehensive mechanization rate of over 80% for crop cultivation and harvesting by 2030.

There is no doubt that the agricultural machinery and equipment industry has a broad prospect. Returning to the main topic of the article, what should agricultural machinery enterprises do to cope with the slow development cycle of the industry?

01 Responding to the needs of the times and finding our own positioning

In the face of the trend of the times, every individual is insignificant. Only by following the trend can one make a difference. Especially at present, the more the industry is sluggish, the more it needs to find its own positioning. The foundation for agricultural machinery enterprises to survive is to recognize themselves, find the basis for their own survival, survive first, and then find ways to live better.

Firstly, it is important to follow the policies of national food security, agricultural machinery purchase subsidies, mechanization in hilly and mountainous areas, high standard farmland, green agriculture, and the renewal of old agricultural machinery. Priority should be given to developing models that are included in the "Excellent Machinery and Subsidies" subsidy catalog, leveraging policy resources for promotion, and avoiding blind operation to avoid falling into the traditional low-end competitive product field.

Secondly, identify the positioning and seek structural opportunities. Agricultural machinery enterprises must choose a clear positioning based on their own resources, establish their own track, and the crucial thing is to amplify their "strengths" and make up for their "weaknesses" as much as possible. For example, leading large-scale enterprises in the industry can implement full industry chain management, seize the high-end of the industry, build an industrial ecological service system, and strive to expand into large and comprehensive fields. Small and medium-sized agricultural machinery enterprises cannot follow behind. The optimal path is to focus on segmented tracks and become "hidden champions" in specialized, refined, and new fields. Priority should be given to selecting segmented fields that "large enterprises are unwilling to do, and micro enterprises do not have the strength to do well". They should make efforts in regional markets and specific segmented fields to form an exclusive reputation moat.

Again, act within your means and refuse to blindly follow the trend. Nowadays, in the agricultural machinery industry, whenever development trends are mentioned, they tend to focus on fields such as intelligence, high-end, autonomous driving, and large-scale production. The trend is correct, but not all companies can produce products that cater to future trends. So, agricultural machinery enterprises must act within their capabilities, weigh their own weight and comprehensive strength, measure the feasibility of their business, and never blindly follow the trend.

02 Based on user and market demand, focus on the product itself

It has been proven that the rise and fall of all enterprises are closely related to the products they operate. Whether it is agricultural machinery manufacturing enterprises, supporting processing enterprises, or distribution enterprises, without the basic carrier of "product", everything will be impossible to talk about. Looking at the disappearing enterprises and brands in the agricultural machinery industry, their root cause is product problems.

Crossing the development cycle of the industry, agricultural machinery enterprises must adhere to the business principle of "technology first, product first", and make every effort to make products better, more refined, and achieve customer satisfaction.

Firstly, it should be guided by user needs. User demand is the largest market, and the development and operation functions of all agricultural machinery products must be based on meeting user needs. Traditional agricultural machinery products need to focus on product upgrades, improving quality and reducing costs, extending lifespan, enhancing reliability and cost-effectiveness; Emerging agricultural machinery products should be based on practical application scenarios and focus on improving performance, functionality, and ensuring operational effectiveness.

Secondly, reliability comes first, followed by intelligence. At present, insufficient reliability remains the biggest drawback of domestic agricultural machinery products. Core indicators that directly reflect reliability, such as the average time between failures, service life, maintenance frequency, and user satisfaction of domestic agricultural machinery, vary in overall performance, with a significant gap compared to world-class brands. Among them, many domestic first-line agricultural machinery brands have significantly different performance during the warranty period compared to those outside the warranty period. Most products that exceed the warranty period have a significantly increased failure rate, and both reliability and durability are worrying. We cannot excessively pursue intelligence and blindly focus on it when making products. Instead, we need to implement full process and full process control through technological innovation, focusing on core performance indicators. We must first ensure that the basic functional indicators are solid before upgrading and innovating. Otherwise, all ideas and unrealistic ideas will only be "castles in the air".

Again, let more technological achievements and product upgrades come from the fields. Throughout the years, R&D personnel in agricultural machinery manufacturing enterprises have been prone to the vicious cycle of "theory divorced from practical application". They always believe that their technical designs have undergone theoretical verification and mechanical analysis, but little do they know that translating design theory into practical applications is a systematic engineering process. Converting drawings into products requires continuous optimization based on the coordination of mechanical components, and the users of the products - users - have the most say after experiencing firsthand. So, agricultural machinery enterprises should listen more to the opinions and suggestions of users, let technicians truly enter the fields, think from the perspective of user use, listen more to the voices of users, actively and humbly transform and improve, so as to have a greater possibility of designing good products that meet user needs.

03 Adhere to long termism and enrich oneself

In today's market environment, the era of making quick money and getting rich overnight is gone forever. Regardless of the industry, only by adhering to long-term principles and deeply cultivating the market can we achieve results. For agricultural machinery enterprises in a downward cycle, it is necessary to have a long-term plan, be prepared for a protracted war, pay attention to the enterprise's hematopoietic function, enrich its internal strength, build a strong talent team, reserve strategic resources, deepen multi-party collaboration, cultivate channel networks, and concentrate on energy in order to continuously move forward.

One is to build a team. Talents and teams are one of the core foundations of enterprise management. The more sluggish the economy, the more important it is to retain core personnel and talents and prepare for future growth.

The second is to store resources. On the basis of ensuring cash flow, it is necessary to accumulate resources from multiple sources, continuously accumulate intangible assets such as technology patents, experimental data, reserve equipment production capacity, digital platforms, brand reputation, etc., especially for user services. We must not shirk responsibility, fulfill commitments, and operate with integrity.

The third is to promote collaboration. In the construction of the industrial chain, we should actively promote strategic collaboration among suppliers, service providers, technology partners, etc., form a good industrial synergy ecosystem, jointly respond to challenges, and jointly embrace a new future.

Fourthly, we need to stabilize the channels. No matter how the industry changes, the role of sales channels cannot be replaced. Agricultural machinery enterprises must always pay attention to their own channel construction, whether it is offline physical stores or online platforms. All high-quality partners need to be maintained with great effort. At the same time, we should pay attention to overseas markets, seek opportunities for business expansion through "going global", and cultivate our ability to participate in global competition.

At crossroads, danger and opportunity coexist. Agricultural machinery enterprises must have a clear understanding of the industry trend, recognize themselves, abandon illusions, and actively seek change. They must adhere to product polishing and user needs as the starting point, implement technological innovation, ecological layout, strategic coordination, and participate in global competition. Only with a firm direction, focus on the core, and continuous innovation can we overcome the cold winter and usher in the spring of high-quality development.