2015: Cautious outlook for Europe’s agricultural machinery market

Total equipment sales expected to fall by around 5-10%

The agricultural machinery industry in Europe takes a cautious outlook for 2015, with overall equipment sales expected to drop by around 5-10%. Compared to 2014, sales in the two major markets of Germany and France are believed to fall in the range of 7% and 10% respectively. Similar developments are expected in other key markets such as the UK (-5%) or the Netherlands (-5 to -10%). Weaker market expectations for 2015 follow an overall decline of sales of around 5-10% in Europe in 2014 (compared to 2013). In the CIS Region in particular lower sales are expected as a result of the political crisis in Ukraine and Russian import restrictions for combine harvesters and agricultural commodities.

Major reasons for lower sales in Europe in general include:

• Cyclical factors: the current downward trend can partially be explained by – and must be seen in the context of – the recent boom in agricultural machinery sales between 2011 and 2013.

• Lower commodity prices for cereals and milk and reduced farmers’ income in Europe which limits investment mood and purchasing power for new equipment.

• New rules for EU subsidy payments under the Common Agricultural Policy (CAP) to be introduced in 2015 will add further uncertainties.