Agricultural machinery, the Indian market sets new records

In the first five months of the year, the Indian tractor market is on the way to setting new sales records, while the USA is showing a moderate decline compared to last year, but still high volumes. Two-speed trend for Europe: Germany and the United Kingdom are growing, Spain and Italy are slowing down. France is stable

The run of the agromechanic market in India continues. In the first five months of the year, cumulative sales of tractors set a new record, exceeding 370 thousand units and marking +7% over the same period last year. If demand for agricultural machinery were to remain at these levels in the second half of the year as well, the country could close the twelve-month period with a new all-time high, thus bettering the record of 912 thousand vehicles sold in 2022.

The scenario is radically different in North America, where the agro-mechanical sector recorded a double-digit drop. Between January and May, tractor registrations in the United States dropped by 12.2% to just under 117,000 units, with a negative balance of more than 14,000 units compared to the same period in 2022. The market is also slowing down in neighbouring Canada, where sales dropped 14.1% to around 12,000 units. In the case of the two North American countries, the downturn in the segment comes after a prolonged expansionary phase that had taken it to all-time highs. The phenomenon was most evident in the United States, which experienced a five-year period of uninterrupted growth between 2016 and 2021, culminating in 2021 with a record of around 318,000 cars sold. The contraction seen in 2022 (-14.8%) and in this first part of 2023 can therefore be considered as a "pause for thought", all the more so as US demand still expresses high volumes, significantly higher than those seen in the pre-pandemic years.

In Europe the sector has a more diversified trend. Germany, fresh from the -12% marked last year, returned to growth - albeit by a small margin - registering a total of around 13,300 registered tractors in the five months (+4.4% and a positive balance of around 400 machines), thus becoming the leading country in Europe. Positive results also for the United Kingdom, where tractor sales increased by 3% (5,600 vehicles in total). A minus sign, on the other hand, for France, which slowed down slightly (-2% and almost 12,000 thousand vehicles sold, thus ceding the continental leadership to Germany. In addition to France, Spain and Italy also lost ground. In Spain, sales stood at just over 3,300 machines (-17.24%) with a negative balance of over 600 units compared to last year. A smaller drop, in percentage terms, for the Italian market (-9%), where 8,354 tractors were registered between January and May. In the first five months of the year in Italy, demand for technology expressed lower sales volumes than the very high ones reached in 2021 (the golden year for Italian agricultural machinery) and 2022, but still remained at higher levels than in the pre-pandemic years.

On the other hand, the trend of registrations in Russia was surprising. As is well known, the Federation is still subject to severe sanctions, applied after the invasion of Ukraine. However, the embargo, which affects a wide range of products and product categories, does not seem to have affected the agro-mechanical sector too much. Between January and April, tractor registrations are even up compared to the same period last year, when trade restrictions with Russia were not yet fully operatiin. According to data released by the US manufacturers' association AEM, tractor sales in Russia increased by 29% in the first months of the year to close to 14,400 units (11,160 in 2022). The main beneficiaries were the power ranges above 100 horsepower, which recorded +153%.  Finally, Turkey's agro-mechanical sector also benefited, with volumes significantly higher than in 2023 (+48.3% for a total of around 25,500 machines between January and April).

As far as the rest of the year is concerned, the European manufacturers' committee CEMA is reporting a significant deterioration in business confidence. The critical issues that in recent months have affected logistics and supply chains are now being resolved - CEMA writes in its monthly report that monitors the sentiment of agro-mechanical companies - however, operators' forecasts are rapidly turning pessimistic, especially in the Italian, Spanish and Polish markets, with a growing percentage of companies (+9% from March to May) predicting a drop in turnover within the next six months