After a record sales year for new tractors worldwide in 2013, with China and India leading the pack, there was a slight dip in sales in 2014. In North America this year, industry forecasts are for a decline of as much as 20 percent.
Reductions in tax incentives in the U.S. are cited as a factor in the Agrievolution Alliance forecast, but “the major obstacle is the oversupply of the market, so that much depends on movement toward a market clearance of high used machinery stocks.”
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The “pronounced upswing” in the American tractor market came to an end in 2014, the report says, although volumes still approached the very high levels seen at the beginning of the 2000s. More than 235,000 tractors were sold in North America (U.S. and Canada), with the “semi-professional” segment below 40 hp making up about 50 percent of market volume.
“While demand for these lower power categories had calmed down considerably between 2009-2011, during the financial and sub-prime crisis, a clear recovery could be seen the past two years, with sales exceeding the 100,000 mark again in the U.S. alone.”
Now, the analysis says, a “realistic estimation” of the entire North America market “could be a decrease of one-fifth in 2015.”
The big volume markets in 2014 continued to be China and India, where about 50 percent of the units sold worldwide are registered. For the first time after a long period of growth, Chinese sales dropped in 2014, especially for very small power segments. Profitability problems in the professional users sector — example, dairy farms in the north — could have a slowdown effect on that market in 2015.
Unit numbers for tractors in India are the highest in any single country in the world, with 593,000 units sold in 2014. But after a strong first half, sales declined month-to-month. The downtrend was stronger in the very small size categories that are predominant in that market. However, analysts say, the Indian market could reach similar levels to 2014 this year.
Turkey is a high volume market for tractors, but has experienced high volatility over past years. Sales on the European continent in 2014 “underperformed” in most cases, with a decline of 8 percent. In Asia, sales in Japan dropped sharply, down 15 percent. France, previously the largest market in Europe, declined by 20 percent, chiefly due to lower agricultural commodity prices and the adaption process of the new European Union agricultural policy scheme. Germany was the biggest tractor market in Europe in 2014.
Agrievolution estimates a decline of another 5 percent in the global tractor market in 2015, with stronger trends in emerging markets and weaker demand in developed markets of North America and Western Europe.