China’s tractor production in the first half of 2025 reached 265,944 units, marking a 7.2% year-on-year decline, according to the latest data from the National Bureau of Statistics. Despite this contraction, industry analysts maintain their full-year forecast of 500,000 units, anticipating a recovery in the second half driven by policy support and export demand.
1. H1 2025 Production Overview
(1) Total Production: 265,944 Units (-7.2% YoY)
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June 2025 output: 31,662 units (-4.1% YoY)
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Cumulative Jan-Jun 2025: 265,944 units (-7.2% YoY)
| Tractor Type | June 2025 (Units) | YoY Change | Jan-Jun 2025 (Units) | YoY Change |
|---|---|---|---|---|
| Large (>100 HP) | 5,688 | -17.6% | 64,359 | -4.1% |
| Medium (25-100 HP) | 15,974 | +1.2% | 137,585 | -6.9% |
| Small (20-25 HP) | 10,000 | 0% | 64,000 | -15.8% |
(2) Key Trends by Tractor Category
A. Large Tractors (>100 HP): Sudden Downturn After Strong Q1
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June 2025 production: 5,688 units (-17.6% YoY)
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H1 2025 cumulative: 64,359 units (-4.1% YoY)
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Analysis: After a strong Q1 (+7.6% YoY in Jan-Feb), production declined sharply in May (-32.8% YoY) before moderating in June.
B. Medium Tractors (25-100 HP): Signs of Stabilization
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June 2025 production: 15,974 units (+1.2% YoY)
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H1 2025 cumulative: 137,585 units (-6.9% YoY)
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Analysis: After months of decline, June saw a slight rebound, suggesting demand may be stabilizing.
C. Small Tractors (20-25 HP): Persistent Decline
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June 2025 production: 10,000 units (flat YoY)
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H1 2025 cumulative: 64,000 units (-15.8% YoY)
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Analysis: Small tractors remain the weakest segment, though the rate of decline has slowed since Q1.
2. Full-Year 2025 Forecast: 500,000 Units
Despite H1 declines, industry experts project full-year production of 500,000 units, with diverging trends across categories:
| Tractor Type | 2025 Forecast (Units) | YoY Change | Key Drivers |
|---|---|---|---|
| Large (>100 HP) | 125,000 | +10% | – Farm consolidation – Government subsidies for high-HP models |
| Medium (25-100 HP) | 250,000 | +5% | – Replacement demand – Export growth to developing markets |
| Small (20-25 HP) | 125,000 | -10% | – Declining smallholder farming – Competition from used tractors |
Supporting Factors for Recovery
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Policy Stimulus:
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“Replace Old with New” subsidies for high-HP tractors.
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Export incentives under Belt & Road Initiative (Africa, Southeast Asia demand).
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Technological Shifts:
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Smart & electric tractors gaining traction.
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Precision farming adoption driving upgrades.
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Seasonal Production Patterns:
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Historical data shows H2 output typically rebounds after mid-year lull.
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3. Market Challenges & Risks
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Export Uncertainties:
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Geopolitical tensions may disrupt shipments to key markets.
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Overcapacity in Medium Segment:
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Inventory buildup could delay production recovery.
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Rural Labor Shortages:
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Younger farmers prefer larger, automated machines, reducing small tractor demand.
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4. Conclusion: A Bifurcated Market
China’s tractor industry is undergoing structural transformation:
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Large tractors will dominate future growth (10%+ annual expansion).
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Medium tractors face saturation but remain stable due to exports.
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Small tractors continue a long-term decline as farming consolidates.
While H1 2025 saw broad-based declines, policy support and export demand should drive a H2 rebound, keeping the 500,000-unit full-year target within reach.
