Subsidy funds increase the opportunity for substantial expansion of agricultural machinery companies

In recent years, China’s agricultural machinery market has seen rapid development thanks to a variety of favorable factors. However, the “Opinions on Promoting Sound and Rapid Development of Agricultural Mechanization and Agricultural Machinery Industry” (hereinafter referred to as “Opinions”) was formally announced on July 5th. It is of great significance to the long-term development of China's agricultural machinery industry.

The Opinions proposes to increase support for industry policies, continue to implement subsidies for agricultural machinery purchases, implement preferential tax and fee policies, and encourage strategic restructuring of agricultural machinery manufacturing companies to form a number of large-scale manufacturing companies with advanced manufacturing capabilities and strong competitiveness. The enterprise groups and industrial clusters promote the development of the agricultural machinery industry, improve the manufacturing level and product quality of the agricultural machinery industry, and build a modern agricultural machinery circulation system.

The development of agricultural machinery industry is more prosperous

According to statistics, there are about 20,000 manufacturing enterprises in the domestic agricultural machinery industry, and three major industrial bases have been formed in the country, namely, the Luoyang industrial cluster that produces tractors and agricultural vehicles; the production of harvesters, tractors, low-speed vehicles, and agricultural construction machinery. Shandong Industrial Clusters; production of agricultural diesel engines, paddy field tractors, combine harvesters, plant protection machinery, agricultural water pumps, agricultural and sideline products processing equipment of the Jiangyan industry group.

In recent years, the development momentum of China's agricultural machinery market has grown by leaps and bounds. In 2009, China’s major agricultural machinery tractors, harvesters, and on-site operating machinery all flourished. The annual sales volume reached the highest level in history. Large and medium-sized tractors approached 400,000 units, an increase of nearly 30% year-on-year; The machinery exceeded 600,000 units at one stroke, an increase of over 55% year-on-year. The market for on-site working machinery was not to be outdone. Production and sales reached nearly 380,000 units, an increase of nearly 50% year-on-year.

It is expected that China's large and medium-sized tractors will record a record high in 2010, and the annual sales volume is expected to exceed 500,000 units, and the harvester will remain at a high level of 600,000 units. The good expectations have greatly boosted the confidence of production companies. Since the growth of production and sales of some enterprises last year, this year is expected to continue to expand. The company survey at the beginning of the year shows that many companies have established expansion plans under the guidance of quantity, and are autonomous. The brand is even more radical, setting an increase of more than 60%, and some agricultural machinery companies even plan to double their sales.