Written by Justin Roberts from Agriland
It has been a disappointing sales season for the machinery trade, but it was not unexpected as many companies were reporting a downturn in the latter part of last year, and those that attended Ploughing 2023 were less than ecstatic about prospects.
Yet, the mood is not one of unfathomable gloom, more a resignation to fate as the wheel of fortune turns, bringing a pause to the frantic rush of the past three years, a period of unexpected buoyancy in the trade.
All of the dealers and manufacturers I have spoken to suggest that sales have been down by 15% to 20%.
This figure is suspiciously uniform across the board and there is the chance that some have suffered a good deal more but are unwilling to admit it.
Basic machinery is selling into smaller farms thanks to being budget friendly
Then, of course, there are others who will have not have done so badly and it is the smaller dealer serving the smaller farmer that seems to be weathering the cooler winds better than most.
As one pointed out, farmers will always spend money on equipment that saves them time and effort and it is the smaller items which save a few minutes each day which seem more resistant to sales dips, what might be called the bigger wheelbarrow effect.
Meanwhile, it is a major complaint of the the larger manufacturers that the supply lines of the distribution network remain clogged with unsold machines and until these are sold and out of the way, the new models they have developed won’t make it into the dealers’ showroom.
Tractor sales may not have been as bright as as hoped, but they are still being bought
This has two immediate consequences, the first is that dealers may enter a discounting war which may be of short-term benefit to the end user, but it will result in problems further down the line.
The second is that if machines are sold at a low margin, then there won’t be the the capital to invest in new stock, and that new stock may be even more attractive to customers, but it won’t be readily available until all the older machines are out of the way.
It is this chicken and egg situation which bedevils the trade at the present moment in time.
This year we have seen a definite trend in larger machines shedding much of the complexity and associated cost in bid to make them more appealing to farmers.
From one perspective this may just be companies trying to reduce the price as the good times grind to a halt.
Pottinger has made changes to its Jumbo Wagon range to make them easier to adapt to
On the other hand, there is a growing awareness that machines may be becoming just too complex and that as clever as they may be, having to spend time setting up all the electronic gizmos detracts from the overall efficiency.
It is also widely held that skilled staff are becoming harder to find, but why do they need to be so skilled?
Is it because farming has become too complex, and will making machinery more amenable to irregular users help in this regard?
An enthusiasm for chips with everything might not have helped in this regard. Yes, very clever things can be done, but do they need to be done?
I have asked as to whether people want to be sat in an office micro-managing their fleets on an app, or would they prefer to be out in the field getting their wellies muddied?
The technology may be impressive, but does the market want it?
The answer is resounding, farmers want to farm, not be the slaves of the latest notion from a group of software engineers who believe they can do a better job of it.
It is these sorts of questions that are now being asked as manufacturers find themselves with the time to step back and think a little about where they are heading, rather than dashing madly around trying to keep up with demand.
In the meantime it is a question of consolidation, the large family-owned companies on the continent can batten down the hatches and draw upon reserves; one bad year is quite survivable, three in a row and then it’s time to be a little more drastic.
Corporations, on the other hand, have shareholders to answer to and the directors need quick fixes to make it look as if they are on the ball, and it is from this sector that we might expect to see a few cutbacks and changes if sales don’t start to look up.
Family-owned companies have no shareholders to appease and so can plan long-term
Indeed, it has already started in the US with assembly workers being laid off by John Deere while CNH has announced its intention to cut staff and overhead costs by 10-15% over the entire group.
It is going to be a tough 2024 for many, with only limited hopes for 2025. Those who are flexible and resilient will survive, for farming never stops, nor does its demand for new machinery.
The post Opinion: Resilience is the new watchword as machinery sales lag appeared first on Agriland.co.uk.
Continue reading on the Agriland Website...
It has been a disappointing sales season for the machinery trade, but it was not unexpected as many companies were reporting a downturn in the latter part of last year, and those that attended Ploughing 2023 were less than ecstatic about prospects.
Yet, the mood is not one of unfathomable gloom, more a resignation to fate as the wheel of fortune turns, bringing a pause to the frantic rush of the past three years, a period of unexpected buoyancy in the trade.
All of the dealers and manufacturers I have spoken to suggest that sales have been down by 15% to 20%.
This figure is suspiciously uniform across the board and there is the chance that some have suffered a good deal more but are unwilling to admit it.
Basic machinery is selling into smaller farms thanks to being budget friendly
Then, of course, there are others who will have not have done so badly and it is the smaller dealer serving the smaller farmer that seems to be weathering the cooler winds better than most.
As one pointed out, farmers will always spend money on equipment that saves them time and effort and it is the smaller items which save a few minutes each day which seem more resistant to sales dips, what might be called the bigger wheelbarrow effect.
Holdups in the system
Meanwhile, it is a major complaint of the the larger manufacturers that the supply lines of the distribution network remain clogged with unsold machines and until these are sold and out of the way, the new models they have developed won’t make it into the dealers’ showroom.
Tractor sales may not have been as bright as as hoped, but they are still being bought
This has two immediate consequences, the first is that dealers may enter a discounting war which may be of short-term benefit to the end user, but it will result in problems further down the line.
The second is that if machines are sold at a low margin, then there won’t be the the capital to invest in new stock, and that new stock may be even more attractive to customers, but it won’t be readily available until all the older machines are out of the way.
It is this chicken and egg situation which bedevils the trade at the present moment in time.
Sales recovery through simplicity
This year we have seen a definite trend in larger machines shedding much of the complexity and associated cost in bid to make them more appealing to farmers.
From one perspective this may just be companies trying to reduce the price as the good times grind to a halt.
Pottinger has made changes to its Jumbo Wagon range to make them easier to adapt to
On the other hand, there is a growing awareness that machines may be becoming just too complex and that as clever as they may be, having to spend time setting up all the electronic gizmos detracts from the overall efficiency.
It is also widely held that skilled staff are becoming harder to find, but why do they need to be so skilled?
Is it because farming has become too complex, and will making machinery more amenable to irregular users help in this regard?
The digital terror in relation to sales
An enthusiasm for chips with everything might not have helped in this regard. Yes, very clever things can be done, but do they need to be done?
I have asked as to whether people want to be sat in an office micro-managing their fleets on an app, or would they prefer to be out in the field getting their wellies muddied?
The technology may be impressive, but does the market want it?
The answer is resounding, farmers want to farm, not be the slaves of the latest notion from a group of software engineers who believe they can do a better job of it.
It is these sorts of questions that are now being asked as manufacturers find themselves with the time to step back and think a little about where they are heading, rather than dashing madly around trying to keep up with demand.
Heads down and carry on
In the meantime it is a question of consolidation, the large family-owned companies on the continent can batten down the hatches and draw upon reserves; one bad year is quite survivable, three in a row and then it’s time to be a little more drastic.
Corporations, on the other hand, have shareholders to answer to and the directors need quick fixes to make it look as if they are on the ball, and it is from this sector that we might expect to see a few cutbacks and changes if sales don’t start to look up.
Family-owned companies have no shareholders to appease and so can plan long-term
Indeed, it has already started in the US with assembly workers being laid off by John Deere while CNH has announced its intention to cut staff and overhead costs by 10-15% over the entire group.
It is going to be a tough 2024 for many, with only limited hopes for 2025. Those who are flexible and resilient will survive, for farming never stops, nor does its demand for new machinery.
The post Opinion: Resilience is the new watchword as machinery sales lag appeared first on Agriland.co.uk.
Continue reading on the Agriland Website...
