Fendt anticipates record year for 2013

Survey results indicate Fendt will have a record year in 2013, and continued growth in the coming years.

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The new tractor production network at the AGCO/Fendt locations in Marktoberdorf and Asbach-Bäumenheim, which went into operation in the autumn of 2012, is now running in top form. Current surveys confirm a healthy environment and good prospects for farming and the agricultural equipment industry. After 2012, where the production and sales figures remained at about the same level as in the previous year, the agricultural equipment manufacturer is expecting a new record year for 2013, Fendt is planning to sell 18,000 tractors in the current business year.

“According to the latest results of surveys in farming enterprises and the agricultural equipment industry, we are currently in a healthy environment with good to excellent prospects for the long-term,” said Peter-Josef Paffen, Chairman of the AGCO/Fendt Management Board at the beginning of the international press conference on October 8, 2013, summarizing the current situation in the industry, and then presented selected survey results. “The European umbrella association of the agricultural equipment industry, the CEMA, surveys companies each month to determine a new Business Barometer index. Starting with a good business outlook and rather cautious expectations at the beginning of the year 2013, the mood in the agricultural equipment industry has improved during the course of the year. The agricultural equipment industry currently expects continued solid, positive business development. Leading farmers are surveyed four times a year in Germany. The results are recorded in the Konjunktur- und Investitionsbarometer Agrar Deutschland (Ag Business Activity and Investment Barometer Germany). According to the survey, the mood in professional farming has remained good since the beginning of 2011 and currently continues to be good. The latest report of the Food and Agriculture Organization FAO concludes that the prices for agricultural products will remain at a relatively high level in the next 10 years. Even if there are always isolated extreme effects on individual businesses and regions due to drought, severe storms, flooding and unfavorable weather in Germany, Europe and worldwide, the overall situation for farming and the entire agricultural industry and the prospects for the future are solid. 

“We therefore expect that agriculture will see a positive development on all continents and in all countries. Agricultural businesses will prepare themselves for a successful future by making targeted investments. Moreover, we can say today that we have expanded our production capacity at just the right point in time, so we are very well prepared for further growth,” said Paffen.

2013 will be a new record year
With 14,588 units sold, production and sales of Fendt tractors in 2012 remained at about the same level as in the previous year. “The foreign and domestic markets were by all means open and ready for higher sales. Only the slightly longer than planned start-up time for the new final assembly at the end of last year has kept us from achieving the forecasted higher unit sales. Even more important than higher unit sales was the professional and disciplined start-up of the new final assembly area and the new logistics processes with a completely new system,” explained Paffen. “In this way we were able to start into the new year with a relatively comfortable volume of orders. And because the new factory has been steadily increasing production in the first quarter of 2013, day after day and week after week, and has reached its top form in the second quarter, we were able to reduce the delivery backlog by the time the company holidays started in August. Today we are in a normal cycle of order-related production with a delivery time between two and three months. The sales target for 2013 is some 18,000 Fendt tractors. This will be a new record,” continued Paffen.

Fendt harvesting
The corporation has invested intensively in harvesting products in the past years. Now Fendt offers a comprehensive line of combines ranging from 180 to 500 hp, available in straw walker and hybrid versions. The market launch of the Fendt Katana 65 forage harvester was a success. “In the 650 hp market segment, we achieved a market share of more than 10% in Germany straightaway, despite a sharply declining market. That is excellent and we now also offer the Katana in France, Italy and England. Other countries will follow,” said Paffen.
Fendt will present two additional models of the Fendt Katana forage harvester at the Agritechnica, each one performance class higher and lower. Fendt also offers a comprehensive line of big balers and round balers.

Investments at a high level
The investments for the modernization, renovation and expansion of the Fendt locations in Marktoberdorf, Asbach-Bäumenheim and Hohenmölsen will also remain at a high level in 2013. The focus will be on the final measures required for Fendt ahead in the area of production, the extension to the Fendt Forum customer center, and the many modernization measures throughout the company and locations. After the large investments made in the past six years, investments will taper off to a normal level in the upcoming years.

Research and Development substantially expanded
“We have also substantially expanded the area of research and development in the past years. The move into the new building, which was completed a good year ago and has 120 additional work places, went quickly. We are also continually updating and expanding our testing stands for tractor and forage harvester development. The expenses for research and development amounted to some 55 million euro in 2012, slightly more than planned. The development budget for the current year has climbed to about 62 million euro.”

Optimal number of employees
In terms of the size of the workforce, Fendt is approaching the planned optimal number of employees step by step. Increased efficiency in the new Fendt factory means that significantly more units can be produced with the same number of employees. In the exceptional year 2012, the number of employees first increased rapidly. At the end of 2012 there was a total of 4,165 employees at the four AGCO locations Marktoberdorf, Asbach-Bäumenheim, Hohenmölsen and Fella in Feucht. That was 322 more than at the end of 2011, of which 289 were for the start-up of the new production in Marktoberdorf and Asbach-Bäumenheim. Mid-2013 the number of employees declined by 147 to 4,018. At the Hohenmölsen and Feucht locations there were 26 more employees and in Marktoberdorf and Asbach-Bäumenheim 173 fewer.

Market share increased
The tractor market in Germany is currently declining slightly, but remains on a stable, high level. The German Federal Office for Motor Vehicles recorded 20,657 registrations in the first eight months. That was 2.8% fewer than in the previous year. Fendt once again leads the national tractor league above 50 hp and increased its market share from January to August 2013 by 0.6%, from 24.0 to 24.6%. Growth is even better for Fendt in the high-horsepower tractor segment over 200 hp. Here the market share climbed from 35.2 to 38.4%. This reflects Fendt’s strength in the high-horsepower tractor segment. “Due to the relatively good mood among farmers in Germany, we are expecting a continued stable market.

Market development in the export markets
The export share of Fendt tractors in 2012 was 60.5%. France, along with Germany, is the strongest driving force on the European tractor market. The French market has been expanding three years in a row and Fendt has been growing faster than the market. At the end of the year Fendt will achieve a two-digit market share in France for the first time. In Italy the general mood has been subdued for some time already, also in agriculture. The tractor market dipped below 20,000 units in 2012 for the first time. Currently the market remains at this low level and a general upward trend is still not in sight. However, Fendt has been receiving rather positive signals from wine and fruit-growers. That is why Fendt was able to maintain its market position and even slightly expand it in parts.

In Great Britain, the situation has been difficult for farmers for a long time now. Unfavorable weather conditions resulted in a significant decline in farming income. Fendt increased unit sales and market share contrary to the trend. The Austrian tractor market was extremely difficult for Fendt in 2012. Now the unit sales and market shares are climbing again, despite an atypical strong market decline for Austria. The general market situation in Spain was also difficult in 2012. There are more tailwinds in the current year, especially in the professional segment. Here the positive effects from the further development of the sales network have taken hold.Fendt had excellent results in Switzerland in 2012 and expects a stable market with a continued increase in unit sales and market shares for the current year.

The Central European markets are still subject to strong fluctuations. Harvest volume, prices and short-term country-specific investment subsidies have had both a positive and negative influence on the markets. Fendt was able to hold its ground on a substantially declining market in Poland. The market in the Czech Republic has been relatively stable for several years. The Slovak Republic has been experiencing an upward trend after a decline. In Hungary, the market has been recovering slowly, but remains under pressure. Bulgaria has seen stable and good development. Fendt was able to expand our market position for tractors and combines. “The development in Romania is also encouraging. We increased unit sales and market share significantly there. A highlight this spring was the delivery of 35 high-horsepower tractors 936 Vario en bloc to the large-scale farming business Braila,” reported Paffen.

In the region Eastern Europe, the Ukraine has been Fendt’s most stable market over the past years. With four additional Fendt importers, a continued positive trend is expected. On the Russian market, AGCO sets a new course with the joint venture. “We expect a positive development for Fendt with these sales activities. This is an important region for our further growth,” emphasized Paffen. The sales network in the USA and Canada is being expanded and a step by step improvement in market position, which is also due to the special US equipment version for the new 700/800 Vario and 900 Vario models, is expected.

The region APAC shows a positive trend. Fendt is active in the countries Australia, New Zealand, Japan and Korea; unit sales and market shares are climbing continually. “Overall, we can say that we are preparing ourselves intensively for further growth. We are reinforcing our sales and marketing activities on all the markets I have mentioned and will tackle new markets around the world in the near future. The goal is to establish the technology brand Fendt around the world in all regions with modern agriculture. In the next three to five years, we aim to sell 20,000 Fendt tractors,” said Paffen, summarizing the global Fendt sales strategy.