28 December 2001

German exports on rise

The good news from the

German farm machinery and

tractor industry is a strong

performance in export sales.

This is helping to

compensate for a slowdown

in demand in the German

home market

FARM equipment investment in Germany has been hit by a series of scares about food safety and animal health.

Starting with BSE and followed more recently by concern about foot-and-mouth, these have persuaded some farmers to delay machinery replacement plans.

Although most of the gloom appears to be concentrated on livestock producers, an analysis of the German market during the first six months of this year suggests that downturn in machinery investment is shared by arable farmers.

Cultivation machinery and sprayers showed some of the sharpest downturns, together with balers of all types. Machinery salesmen are hoping that this years favourable harvest will encourage farmers to boost their investment plans, but the first post-harvest reports from dealers and machinery makers do not show evidence of an upturn in demand.

Spending on new equipment in Germany was down 17% during the first six months of this year compared with the same period last year, but this was partly offset by an 8% rise in export sales. The net result was a fall of just 2% in total output for the industry, according to the latest figures from the agricultural machinery section of the German Machinery Manufacturers Association, VDMA.

The strongest overseas markets for German tractors and machinery during the January to June period this year included the US with a 24% rise, and exports to central and eastern Europe were up by 26%, helped by a massive 170% boost to sales in the Ukraine. Sales to other EC countries fell by just 4%, with French sales down by 13% while shipments to the UK rose by 4%.

British trade with Germany shows a big balance in Germanys favour. Exports of machinery to Germany were worth £24m last year, but the UK imported machinery worth more than £84m from Germany. Trade in tractors was more evenly balanced, with UK exports worth £59m against £68m imported from Germany. The net result was a massive £73m trade balance in Germanys favour

Much of the strength of the farm equipment industry in Germany is in farm machinery production, much of it still in the hands of family owned businesses. Unlike Britain, where so many of the big names in the machinery industry have disappeared or pulled out of farm machinery production, the industry in Germany is still dominated by internationally successful companies such as Amazone, Claas, Grimme and Krone.

Although production in Germany covers almost every sector of the farm machinery market, the biggest successes are in high value equipment such as combine and forage harvesters plus self-propelled potato and sugar beet harvesting machines.

There is also an ongoing success story from some of the German component makers, and many of the leading tractor firms worldwide rely on specialist companies such as Bosch, Walterscheid and ZF to supply parts for their production lines.

Germanys tractor industry has fewer successes to report and, as in Britain, most of the production is controlled by overseas companies. John Deere has been the biggest manufacturer for almost 30 years, accounting for more than half of the 44,975 tractors built in Germany last year. Deutz-Fahr is part of the Italian owned Same Deutz-Fahr group after a takeover bid, and some Deutz tractors are now being built at the Same factory in Italy. Fendt is also under overseas control following an agreed takeover bid by the AGCO group.

Production of the high powered and high priced tractors at the Schluter factory ended in the 1990s, just a few years after Daimler-Benz stopped building the highly successful MB-trac range. Another setback for the German tractor industry was the Case IH decision to close down their plant at Neuss and transfer production of Maxxum models to Doncaster. There have also been some German companies moving into tractor production for the first time, including Claas with the novel but complicated Xerion multi-function tractor, but so far none of the new arrivals has achieved large-scale production. &#42

John Deere production plays an important part in Germanys tractor and machinery success.


1999 2000 change %

Production (£m)

Tractors 912 977 +7.1

Machinery 1191 1174 -1.4

(inc combines)

Combines 313 290 -9.3

Exports (£m)

Tractors 598 662 +10.6

Machinery 707 690 -2.4

(inc combines)

Combines 214 189 -13.2

This years better harvest might give a welcome boost to tractor demand in Germany.

Combines and self-propelled potato and sugar beet harvesters play an important part in Germanys machinery exports business.