Press releases

Positive forecast for current business year

“Modern, professional agricultural business owners and contractors are the main target group for the Fendt brand. According to the latest surveys of the German Agricultural Society, the agricultural business climate has improved again significantly. The crisis is over. Since the end of 2010, our customers have been investing in new machines for modernising their businesses and for increasing the efficiency of their agricultural production. The main reason behind this is the significant increase in prices for agricultural products,” said Peter-Josef Paffen at the international AGCO/Fendt Press Conference on 15 June in Marktoberdorf, summarising the current situation in agriculture.

“A few weeks ago, there was still serious discussion in the agricultural industry, also here at Fendt, as to whether or not the rapid upward trend is progressing too fast. As we see it, though, the water shortage and the associated declines in mass yields that have been forecast for several regions will put a damper on this growth,” pointed out Paffen.

Positive business climate in the European agricultural equipment industry

The CEMA, the European association of the agricultural machinery industry, conducts the CEMA Business Barometer every month; more than 100 top managers from the agricultural equipment industry are surveyed. The current results show that we are now in a steady boom phase. The current business environment has now been rated as excellent again. And the expectations for the next six months are very high. “We at Fendt can confirm this trend. Our business is also running at a very high level. Incoming orders and the backlog of orders are at a record level,” said Paffen.

Tractors sales 2010

The effects of the global financial and economical crisis were felt well into the second half of 2010. Important high-volume markets, in particular France, were under extreme pressure. Fendt could not escape this declining trend, Fendt tractor sales declined to 12,584 units in 2010. That was 7.8 percent, or 1,071 units, less than in the previous year, but a bit better than the overall market, which shrank by 8.3 percent. “In the current year, we are calculating with an increase in sales of 15 – 20 percent to approximately 15,000 units. That is about the same as the record level from 2008. We will work aggressively to achieve our target figures, despite some supply bottlenecks with important suppliers,” said Paffen.

Harvesting – consistent implementation of the corporate strategy

“In the harvesting area, the AGCO Corporation has invested heavily in the manufacturing locations and products. Since the beginning of March, Laverda, headquartered in Breganze, Italy, has become a part of AGCO to one hundred percent. The combine factory in Northern Italy has a 130-year history and the staff there, some 450 employees, have just as strong a relationship to combines as the staff here in Marktoberdorf and Asbach-Bäumenheim has to Vario tractors. We are currently continuing to expand the factory, a step at a time, to become the AGCO Harvesting Centre of Excellence for Europe. Numerous investments have already been made in the production facilities there. Further projects, for example, building a customer and training centre as well as expanding the parts service, are planned for the upcoming years,” said Paffen.

Today Fendt offers a complete line of conventional and rotary combines from 200 hp to 500 hp, a comprehensive line of square and round balers and, at the beginning of May, the first two Fendt Katana forage harvesters were manufactured at the AGCO Hohenmölsen location and have already been delivered to the first customers.

Despite the strong decline on the combine market in the last two years, AGCO and Fendt were able to expand market share significantly. Fendt is consistently implementing the corporate strategy here, which is to also achieve a good position in the area of harvesting machinery.

Revenue with Fendt machines

In 2010, revenue dropped by 6 percent for all Fendt machinery (tractors, combines, balers). “In the current year, we are expecting a strong increase again.”

Investments

In 2011, investments totalling 115 million euros are planned for the Fendt locations. A large share goes into the new final assembly. Overall, the AGCO Corporation invested a total of 172 million euros in the Fendt Ahead² project. Some 33 million euros were invested in the Fendt cab and component factory in Asbach-Bäumenheim. Construction for the new cab final assembly will begin there in August.

Research and Development

The costs for research and development are climbing continually. In 2010, a total of 47 million euros were invested in various tractor projects and the Fendt Katana forage harvester. A large part of this goes into projects for compliance with future emissions regulations. “We are very pleased that our President and the AGCO Board have recently approved an expansion in capacity at the Research and Development Centre in Marktoberdorf by an additional 120 jobs. This allows us to push important future projects ahead faster. The focus lies on electronic systems and automation,” added Paffen.

Employees

“Despite the declining sales figures in the last two years, 2009 and 2010, we have done everything to keep our permanent staff. We have succeeded in doing this largely by implementing short working hours, but also by reducing overtime and paid holidays and reducing the temporary staff. Today we desperately need all employees, so that we can achieve our ambitious production objectives.”

More than 80 employees are now at work at the new AGCO plant in Hohenmölsen, Saxony-Anhalt, south of Leipzig-Halle. The heavy plate parts for Fendt tractors are manufactured there and the new Fendt forage harvester is assembled there. A big new assembly hall is currently being built for the future production of a larger number of forage harvesters.

Market development – market positioning of Fendt

The market in Germany (for tractors over 50 hp) continued to decline in 2010. Despite a tangible market upturn at the end of the year, the number of registrations declined by 8.5 percent to 23,077 units. For 2011, the overall industry is expecting a 15 percent increase in registrations to 26,500 units. “We were able to increase the Fendt market share from 20.1 to 20.5 percent and claim market leadership with a clear margin.” The start into 2011 was exceptionally dynamic. In the first four months, the German Motor Vehicles registered a total of 8,751 registrations, 36 percent more than in the previous year. Fendt even increased registrations by nearly 50 percent. “This is an impressive example of how much the market can change within a year. We are particularly strong in the professional segment above 200 hp. In 2010, more than every third registered tractor was a Fendt from the 800 or 900 Vario series. Especially remarkable for the German market: with 760 units sold, the 205-hp 820 Vario was the most-sold tractor in Germany for the third year in a row. This positive development has continued and intensified in 2011. In the first four months we were able to more than double the registration figures in the segment over 200 hp and increase market share to over 50 percent. This is quite a respectable achievement by the German team, led by Andreas Loewel, Managing Director of AGCO Deutschland GmbH and therefore responsible for the overall Fendt business in Germany,” explained Paffen.

Market development in Western and Central Europe

The French market is still the largest market in Europe, although it experienced a large market decline in 2010 to only 28,663 units. Fendt was able to maintain a market share of 8 percent. “For 2011, we expect significantly higher sales figures for Fendt again.”

In Italy, Fendt was even able to further expand sales, despite a generally declining market (-14 percent). “This is due to the exceptionally good acceptance of the new 200 Vario VFP specialty tractors and the new 200 Vario standard tractors. We are expecting that this positive trend will continue,” explained Paffen.

In Spain, Fendt increased unit sales and market share despite a declining market. In Spain, we now have a market share of nearly 5 percent and we continue to see potential in this market.”

In Austria, Fendt succeeded in taking a big step forward. Here many customers were excited about the new 200 Vario and the sales target of 1,000 Fendt tractors has now moved well within reach in Austria.

In Switzerland, the market has also developed very positively for Fendt with the 200 Vario. “We continue to see a stable positive market development here.”

Fendt continues to be the market leader in Luxembourg.

In Holland, Fendt has had an excellent market position for many years. “We expect that unit sales will climb noticeably in 2011.”

In Belgium, Fendt achieved stable and slightly increasing market shares of around 11 to 12 percent.

In Scandinavia, the market was extremely difficult in 2010. “Currently we are seeing a positive trend in the entire region.

There were extreme differences in the market trend in the central European countries in 2010. In Poland, we were able to double our sales to more than 500 units. In other regions, the markets were extremely weak. We have felt a market upturn in almost all countries this year.

“In the region West and Central Europe, our plan is to expand the Fendt market share to 10 percent over the next years. In 2010, we increased the Fendt market share by 0.5 to 7.7 percent. And we expect a further increase in our market position in 2011. The amount will depend on the overall market development. In summary, I can say that European farmers are investing significantly more in agricultural machinery again. We still have to see if the regional droughts have an effect on our agricultural equipment markets.

Overall, we expect relatively stable markets in Western and Central Europe. And with the consistent expansion of interesting markets outside of this region (CIS, Asia, Australia, North America, South Africa), we will secure the planned higher number of Fendt units that are manufactured in our new factory. To provide our Fendt Sales with significantly better support in all countries, we have started a comprehensive marketing efficiency offensive,” said Paffen in conclusion.