During the past year, the agricultural machinery industry in Germany already experienced an upswing following the recession. In 2010, turnover rose 2% to €5.77 billion. “The long-term, positive underlying factors influencing the industry are thus reasserting themselves,” explains Dr Bernd Scherer, Managing Director of the VDMA Agricultural Machinery Association. “Modern agricultural machinery is contributing to meeting the increased demand for foodstuffs and renewable energy.”
Due to higher levels of orders on hand and positive agricultural incomes, for 2011 the VDMA Agricultural Machinery Association anticipates that turnover will increase by 10% to €6.4 billion. Although this is still 15% below the record level of the boom year 2008, the industry is satisfied with the present degree of capacity utilisation of the production facilities.
Incoming Orders Currently Grow by 40%
With large backlogs of orders from the year 2008, in contrast to other industries, producers of agricultural machinery and tractors did not experience a decline in turnover until the spring of 2009. Beginning in May 2010, orders and turnover then increased again, surpassing the level of the previous year. Given a 40% increase currently, the order book situation leads to strong optimism within the branch.
Tractors as Precursor to the Boom
An analysis of turnover figures for 2010 reveals differing trends. Tractors led the way in the recent upswing; production expanded again beginning in the second quarter of 2010. During the entire year of 2010, 53,450 tractors came off assembly lines in Germany, representing an increase of 15% over the previous year. Turnover increased accordingly. Four out of five tractors produced in Germany were sold in other countries.
The market for harvesting machinery remained somewhat more sluggish. Because of low demand in important markets such as Germany, France, Ukraine and Russia, the production of combine harvesters and forage machinery declined for the second consecutive year. This was somewhat compensated by increasing turnover of forage harvesters. However, for the current season, the production of all harvest machinery can be accelerated once more. Following a slight drop in turnover at the conclusion of the 2010 calendar year, the manufacture of soil tillage, sowing, fertilisation and plant protection equipment is now also proceeding at high speed.
German Market on Pole Position
At €3.95 billion, the market volume in Germany equalled that of the previous year, with turnover 6% higher for tractors and 4% lower for agricultural machinery. Farmers and contractors in Germany already increased investment some months ago, as shown by considerably higher sales figures for the fourth quarter of 2010. Economically, the German market is thus presently the foremost in Europe and, in light of the high level of orders on hand, will remain so in the coming months.
The export ratio was 70% for 2010. German producers sold 15% less machinery to France, the most important export market, than in the previous year. Only since a little over three months ago has investment increased again. In contrast, most Central and Eastern European markets have already recovered noticeably. Russia now ranks fourth again among the export markets. At the same time, the import barriers of the Russian government continue to be a significant hindrance to sales of the Western European agricultural machinery industry.
