CNH Industrial’s target is to raise ag segment operating margins from about 12.5% in 2024 to 16-17% by 2030 and a key component to achieving that is precision technology, notes analyst Shane Thomas in Upstream Ag Insights.
“CNH Industrial has been the one player of the big three OEMs that has shared relatively little about its precision ag strategy and initiatives — until now,” Thomas said.
CNH has nearly doubled its R&D and capital expenditures since 2019. With a $924 million R&D budget, the OEM is now allocating 25% — or about $230 million — to precision technology. In 2024, CNH spent 4.5% of revenue — or $924 million — on R&D. Thomas notes that the R&D pipeline supports over 70 new product launches across tractors, combines, crop production tools and precision tech by the end of 2027.
CNH’s reported 2024 precision ag revenue of $784 million, which represented 5.6% of its total revenue, and it targets ~10% of revenue by 2030. “At flat levels from 2024 would mean ~$1.5 billion,” Thomas noted.
CNH builds approximately 80% of its precision technology stack in-house today, with plans to increase this to 90% by 2030, Thomas noted. “This internalization is intended to accelerate integration, performance and farmer usability. This is up from 25% in 2019 (pre-Raven, Augmenta and Hemisphere acquisitions),” he said.
CNH lacks in-house green-on-green technology and instead will rely on the ONE Smart Spray JV from Bosch and BASF. Thomas said, “This is seemingly a pointed strategic move suggesting they do not envision the market drastically moving in the direction of advanced green-on-green spraying for herbicides, or beyond.”
During the investor day, CNH reinforced its preference not to pursue recurring revenue models in its precision and autonomy segments. “CNH autonomy outlook for 2030 was notably not ‘full cycle’ across an entire cropping system and merely autonomous tillage 5 years from now, suggesting they are less bullish on full autonomy,” Thomas said.
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