World Tendencies in the Agricultural Machinery Industry

Agricultural Machinery

Bernd Scherer • 2010-03-04

World Tendencies in the Agricultural Machinery Industry

First Agricultural Machinery Russian Dealer‘s Day in Russia

4th March 2010, Moscow

Bernd Scherer

Managing Director

VDMA Agricultural Machinery



Development of sales in global engineering branch

real variation compared to previous year in %

Source: National Associations, VDMA

-40 -30 -20 -10 0 10 20

Italy

Sweden

Switzerland Germany

Austria

Norway

Western Europe

Spain

Netherlands

Belgium Great Britain

US

Denmark

France

Finland

Japan China

Forecast 2010

Estimation 2009



German machinery exports20 high-range sales markets

Jan -Nov 2009; nominal variation compared to previous year in %

Source: Federal Statistical Office, VDMA

-50 -40 -30 -20 -10 0 10

Russia Spain

SwedenCzech Republic

ItalyPoland

USDenmark

France

Turkey Great Britain

Japan Brazil

IndiaNetherlands

Belgium Austria

Switzerland

Republic of KoreaChina

In total: -24,4 %



Incoming orders

Global economic climate andincoming orders in engineering industry

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

*) Rate of change compared to the previous month of seasonally adjusted and smoothed indexes of incoming orders

45

55

65

75

85

95

105

115

125

Index

Global economic climate

%

Source: ifo-Institut, VDMA

Incoming orders*

-50

-40

-30

-20

-10

0

10

20

30Global economic climate



Impact of crisis on agriculture

Weak and shifting food demand

Pressure on global trade Difficult credit and capital market

Price volatility: - Exchange rates - Commodity prices



Agrarian Markets (1): Cereals and Oilseeds

Rapeseed

Wheat



Declining Income in the Past Two Years (1)

Agricultural Income Development (real index per worker with 2005=100)

Fläche für Grafik

Source: Eurostat

60

80

100

120

140

160

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

European Union

Germany

France

Italy

United Kingdom



Agricultural Income Development (real index per worker with 2005=100)

Fläche für Grafik

Source: Eurostat

50

70

90

110

130

150

170

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

European Union

Bulgaria

Czech Republic

Poland

Romania

Declining Income in the Past Two Years (2)



Source: Freedonia, VDMA, Expert Interviews, Oliver Wyman Analysis



Development of the Main European Agricultural Machinery Markets 2007-2009

nominal % change of European Agricultural Machinery Markets

Source: national statistic agencies, VDMA (incl. estimation for 2009)

26

16

7

16

7

29

20

-5

13

6

21

23

14

25

16

-22

-40

-20

-5

-40

-25

-25

-40

-10

8

-15

-12

-16

-30

-18

-50 -40 -30 -20 -10 0 10 20 30 40

Sweden

Czech Republic

Finland

Austria

Denmark

Poland

Netherlands

Spain

United Kingdom

Italy

France

Germany

EU 15

EU 12

EU 27

2009e

2008

2007



Development of the Export Business - Main Markets for the German Industry Outside the EU

Exports from Germany to … Values Jan-Nov.

Fläche für Grafik Fläche für Grafik

Source: Federal Statistics Agency, VDMA

0

100

200

300

400

500

600

700

800

United States Russia Switzerland Belarus Australia Ukraine

in M

ill. E

uro

2007 2008 2009

-33%

+1%+6%+2%

-62%

-67%



German Agricultural Machinery Industry

Turnover in Bn. Euro %-change

Fläche für Grafik Fläche für Grafik

Source: VDMA Agricultural Machinery Association

0

1

2

3

4

5

6

7

8

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010e-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

30

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010e



Economic Climate in Agriculture:Recent Recovery

12,0

39,0 38,1

17,5

25,120,0

30,7

44,9

-20

0

20

40

60

Dec. Mrc. June Sept. Dec. Mrc. June Sept. Dec. Mrc. June Sept. Dec.

Agricultural business barometer- Russia compared to Germany -

Coverage by sample: 10% of farms, 81% of arable area

Index computed out of: Questions 3, 4: How would you rate the current economic situation of your farm? How would you rate the economic situation of your enterprise in the next 2 to 3 years compared to the current situation?

Mean2000 - 2006

2006 2007 2008 2009

Russia(n = 550)

Germany(n = 854)



Question: We expect our overall turnover within the next 6 months to....

Source: CEMA Business Barometer February 2010

21% 23%

27%

15%

52%

70%

51%

33%23%

50%

63%

33%

15% 15%

33% 38%

33%

54%

17%

33%

0%

20%

40%

60%

80%

100%

Total Industry Arableequipment

Harvestingequipment and

tractors

Lawn, gardenand Municipal

equipment

Livestockequipment

Transportation Components

decrease

remainunchanged

grow

CEMA Business Barometer: Different Turnover Expectations within the Branch



in % of interviewees

Source: CEMA Business Barometer February 2010

Question: When do you expect an overall increase of the order intake again for your entire company?

13

20

23

21

11

5

14 14

24

29

1413

6

25

28

19

911

1. quarter 2010 2. quarter 2010 3. quarter 2010 4. quarter 2010 1. quarter 2011 later

Total (including others)

Arable equipment

Tractors and harvesting machines

CEMA Business Barometer:When does the upswing come?



Source: OECD, 2009



Source: Rabobank based on FAO/Freedonia



Thank you

very much

for your attention

Bernd SchererVDMA Agricultural MachineryPhone +49 (0) 69 6603 1305

E-Mail [email protected]

World Tendencies in the Agricultural Machinery Industry

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