The European agri-machinery and implements market is one of the largest and most developed in the world, driven primarily by two high-revenue, high-growth countries – Germany and France. Over 2015-2020, the growth of this sector in Europe is ‘cautiously’ optimistic, with overall sales expected to drop by 5% to 10%. There is an increased optimism regarding the markets of Spain, Scandinavia and the United Kingdom. The driver for this is the understated, and in some cases, declining sales in Germany, France, Netherlands and the UK.
The sales volume of agricultural machinery and tractors from manufacturers to their trade partners totaled $ 30.7 billion in the European Union in 2013. Notwithstanding dip in sales totals across some countries, especially those mentioned above, and in the CIS region (due to Ukraine and Russia import restrictions), the demand for agricultural machinery in Europe is projected to grow at a CAGR of 4.4% in 2015-2020 period. Currently, the agricultural machinery market is worth $ X billion.
Optimized supply chain, productivity concern, experienced labour force and involvement of FDI in agriculture are some of the factors that has led to growth of total agriculture machinery demand. In addition, essential downtime as dictated by cyclical change exhibited in any industry (following the boom in the agri-machinery over 2011-2013), lower commodity prices leading to reduced income for farmers, and a new EU policy (CAP: Common Agricultural Policy) set to be introduced in 2015.
Technological innovation and precision farming are some of the areas to be exploited for future opportunities. Besides huge scope of development, the major constraints the sector is facing are- uncertainty on government support, low farm income and import restrictions from Russia etc. All these factors affect the growth of the agriculture sector, and hence affect the growth of the agri-machinery industry.
The agricultural machinery industry has products to offer in every stage of a crop cycle. Tractors and combine harvesters are two of the largest product categories. This is followed by balers and sprayers.
Major markets for farm equipment in Europe are Germany and France; both the countries represent around one third of EU’s value added. Geographically, tractors have increased revenues in Spain, Belgium and Turkey, while revenues have declined in France and Austria. Combine harvesters have seen a marked decline in revenues in UK, Italy, Germany and France. With the exception of Italy and Turkey, this downward trend is expected to continue.
Agricultural machinery market in Europe is having around 4500 manufacturing companies. The European agricultural machinery and equipment industry face high competition with renowned players like Deere and Company, AGCO Corp., CNH Industrial N.V, Kuhn, Massey Ferguson, CASE IH, operating in market place. The companies here strive to strengthen their base on the basis of product features, pricing, quality, scale of operation and technology innovation