VDMA Agricultural Machinery Association: Global Agricultural Machinery Industry in the Ascendant

International Group of Experts Discusses Market Developments

The worldwide economic situation for agricultural machinery is exhibiting a distinct upward trend. This was evident at the third meeting of the Agrievolution Economic Working Group, an experts group of the world’s largest agricultural machinery associations, which took place at the EIMA agricultural machinery exhibition in Bologna/Italy. Production volumes for 2010, most recently €58 billion (USD 84 billion), will be at approximately the level of the previous year, with growth in South America and Asia compensating for declines in Europe.

European Markets Catch up with Global Trend

For the coming year, a worldwide increase in production of seven percent is expected. “With the crisis having been only moderately apparent in some regions of the world, European markets are also catching up again, as compared with international economic trends,” explains Gerd Wiesendorfer of the VDMA Agricultural Machinery Association, organiser of the working group.

High Growth Rates in BRIC Countries

This year high growth rates have already resumed in the markets of Brazil, China and India. Increases of one-third for the South American market and just under 20 percent for China are anticipated. In the US, the second largest agricultural machinery market worldwide after the EU, overall sales have remained at the comparatively high level of last year. For 2011 the working group expects that demand in the US can remain stable, that China and India will continue exhibiting above-average growth rates, and that growth of approximately ten percent is possible in both Western and Eastern Europe.

The South American market is so far continuing at a high level, however experience has shown that markets tend to be very volatile; thus the coming year can be viewed with cautious optimism, keeping in mind that the present level is very high. However so far harvest prospects in the region seem very positive. In Japan, following persistently difficult agricultural machinery sales to date, slight growth will again be seen.

Increasing Degree of Mechanization in Emerging Markets

This overall positive forecast for the worldwide economic situation is supported by the increasing income of farmers and by continuing high modernisation requirements in some regions. Particularly in newly industrialised countries such as India and China, due to migration of parts of the population to the cities, a labour shortage is increasing the pressure to mechanise agriculture.

The Agrievolution Economic Working Group is currently composed of the managing directors and marketing heads of the following eleven agricultural machinery associations: AEM (USA), ABIMAQ (Brazil), JFMMA (Japan), FICCI (India), CAAMM (China), ROSAGROMASH (Russia), TARMAKBIR (Turkey), VDMA (Germany), UNACOMA (Italy), AXEMA (France) and A.E.A. (United Kingdom), as well as the European parent organisation CEMA. This new network has assumed the responsibility of promoting the exchange of market information for agricultural machinery at the international level via its own projects. The goal is greater market transparency at a global level, in order to permit the representation of modernisation requirements for agriculture on an economic basis. The working group is co-ordinated by the VDMA Agricultural Machinery Association.