While U.S. and Canadian retail sales of farm tractors starting the second half of 2012 are showing surprisingly resilient, moderating trends in other countries are offsetting improvements in some overseas markets.
The Assn. of Equipment Manufacturers reported that during the January to July period of this year, total U.S. farm tractor sales were up 7.5% while sales of combines were down by nearly 16% compared with the same seven-month period of 2011. AEM reports the same trend was seen with Canadian sales of tractors and combines, with total tractor sales up 4.8% for the period and combine sales declining by 18.1%.
Europe & CIS. The latest figures from VDMA (German Engineering Federation) and reported in a note to investors by North America Equity Research of JP Morgan, sales of farm machinery throughout Europe and the Commonwealth of Independent States is mixed throughout the various regions.
In Germany, tractor registrations were up 7% year-over-year in June, after a down month in May (–8%) and are up 6% year-to-date, after a 26% increase in 2011. Ann Duignan, machinery analyst for JP Morgan, reports that Deere’s year-to-date share declined 40 basis points (bps) to 20.4%, as registrations declined 6% for the brand in June, after a 30% decline in May. AGCO retained its overall top share year-to-date, up 120 bps year-over-year to 28.5%. CNH lost share in 2011, from 15.8% in 2010 to 13.7%; however, the company’s brands recorded a 260 bps increase in May year-to-date, including 130 bps for Case IH/Steyr and 130 bps for New Holland.
Tractor sales growth has begun to moderate in both France and Russia, according to VDMA and JP Morgan. In France, tractor sales increased 8% in June and 4% in May, after 18% growth during the first four months of the year and +20% in 2011; among major categories, the largest increase was in telescopic handlers, which were up 47%.
In Russia, tractor sales increased 15% year-over-year in May (latest month available), with the strongest growth in the over-40 horsepower category (+49%), while sales in the over-100 horsepower were up 24%. Russian combine sales declined 1% year-over-year in May, after growing 4% in January through April.
Registrations declined in June in Great Britain and the Netherlands. In Great Britain, a smaller ag equipment market, tractor registrations declined 23% year-over-year in June, the first decline since July 2011. The growth rate in the UK has been declining through much of this year. Meanwhile, in the Netherlands May tractor sales were down 4% year-over-year, but are up 13% year-to-date.
Brazil Sales Up. Retail sales of farm tractors and combines in Brazil were strong in July, with tractor sales up by 15% and combines by 3%, according to data from Associação Nacional dos Fabricantes de Veículos Automotores (ANFAVEA).
In July, total farm tractor shipments in Brazil were 5,184 units, up 15% year-over-year vs. up 3% year-over-year in June and down 8% in May; combine shipments were 351 units, up 3% year-over-year vs. up 1% in June and down 36% in May.
“Brazil faced a tough year-over-year comparison in 2011, and tractor sales (in units) declined 7%,” says Duignan. “We expect modest growth in 2012 on stronger crop prices and a relatively weak real. Combines were up 17% in 2011, and similar trends continue into 2012, with sales up 6% year-to-date. Overall, high soybean prices and a weak real are encouraging planting activity for the upcoming season beginning in September and October.”
Total tractor unit sales were up 15% year-over-year in July, and have posted increases in only four of the past 22 months. Deere outperformed, with shipments up 40% year-over-year; CNH shipments were up 17%. AGCO sales, including its Valtra brand, was up 5%.
Deere’s tractor market share was 23.3% in July, after 18.9% in 2011. AGCO’s share of the tractor market was 48.5% in July, vs. 50.1% in 2011 and 60% at the peak of the cycle. Combine industry unit shipments were up 3% year-over-year in July. CNH combine shipments were down 5% and its July market share was 35.3%, vs. 46.1% in 2011. Deere's combine unit shipments were up 4% to 166 units, slightly outperforming the industry. Deere’s July combine market share was 47.3%, but 34.6% year-to-date, vs. 36.1% for calendar year 2011. AGCO’s combine shipments were up 22% to 61 units for a market share of 17.4%, according to ANFAVEA and JP Morgan.