Slowing of Decline Expected this Year
In 2009, in the European Union the agricultural machinery market volume decreased by 19% to €20.9 billion. For the present year, in the EU slowing of the downturn to minus eight percent is expected, yielding a turnover of €19.3 billion. While clear improvement can be felt in some Central European markets, the demand for new machinery in France and Spain remains subdued.
Industry Anticipates Next Upswing
However, it can be seen that manufacturers of agricultural machinery and tractors are already anticipating the next upswing. Even in the crisis year of 2009, companies were able to maintain their permanent staff in Germany at the high level of the previous year. New production facilities are now being opened in Germany and, above all, in the growth markets. Currently large international groups and Western European medium-sized companies are intensifying investment in Russia and India, so as to be able to utilise the enormous potentials of these regions efficiently in the medium and long term.
A Drop of Bitterness: Protectionism
Continued protectionist endeavours in some markets remain a drop of bitterness for export-oriented Western European manufacturers. For instance, at present Russian industry is vigorously promoting the extension of import duties previously applied only to combines and forage harvesters to include other product segments. At the same time, 50 percent localisation is aimed at as a prerequisite for participating in state aid programmes. Similar tendencies are exhibited in the Chinese award policy for public invitations to tender, where the order volume largely goes to domestic agricultural machinery companies.
VDMA Economic report
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