The agricultural machinery industry generated a turnover of EUR 7.68 billion in Germany in 2014. The VDMA Agricultural Machinery Association's industry statistics were therefore 8% below the previous year's record figure and settled around the 2012 mark.
"We have been observing a slowing economy since last spring," reports VDMA Managing Director Dr. Bernd Scherer. However, the situation is "definitely not critical," especially as the decrease in turnover did not speed up during the previous year, "and the industry can reckon on there being a solid demand for agricultural machinery this year, too." The current trend of incoming orders gives him cause to be cautiously optimistic, "which are currently just 5% below last year's," says Scherer.
More volatility in the tractor segment
According to VDMA, the turnover for tractor manufacturers was more volatile than the entire industry. Following a huge increase by 16% in the previous year, the production figures dropped by 15% again. At the same time, the trend continued for only manufacturing high performance class models in Germany. Tractors with less than 100 hp engine power only play a marginal role in German factories. Accordingly, the fall in quantities coming off the assembly line in 2014 dropped even more considerably by 19% to 51,500 units.
The turnover figure for equipment for soil tillage, sowing and plant cultivation was roughly 5% below last year's. Thanks to the stable trend with combine harvesters, forage harvesters and silage trailers it was possible to almost maintain the same level as the previous year in the harvest machinery segment. Milking and feed technology experienced an economic boom equipping newly built stalls in Germany and on several other important markets.
Germany performs extremely well
With an export ratio of 72%, the production location performed extremely well in tougher global competition. The downturn in France, which has always been the most important sales market by far for the industry, was felt directly by manufacturers in Germany in 2014. At the end of the day, deliveries plummeted by more than 20%. Contrary to the recently sharply declining market trend, the German export figures to the United States could however be increased yet again. The third largest export market was Great Britain with stable sales for the German industry in line with the market trend, while a quarter less was invoiced with sales partners in Russia.
The domestic market is still important
Local demand still plays a very important part for German agricultural machinery production with a share of 28 percent. In line with the overall trend of the German sales market, the turnover with German retail decreased by 4 percent below the previous year's record level.
The VDMA is reckoning on a turnover from German agricultural machinery locations of approximately EUR 7.1 billion in 2015, which means a further decrease of roughly 7 percent. "The challenges which our industry is facing have not become fewer in light of the weakness on the traditionally major sales markets, USA and Russia", summarises Scherer. However, he is confident that innovative technologies will continue to be called for, especially in the rapidly growing emerging markets.