Tackle sales not as bad as they look…
Continuing our coverage of
the Royal Show, our
technical section focuses
on the machinery, livestock
and arable areas. Here we
turn the spotlight on how
the machinery industry is
reacting to change
YES, the UK farm machinery industry is having a difficult time. But NO, the picture is not as gloomy as official figures might suggest.
Speaking on the eve of the Royal Show, managing director of Dowdeswell Engineering, Tim Dowdeswell said that the depressing sales figures published by the Agricultural Engineers Association refer to sales to dealers.
"UK dealers are not willing to take in extra stock in the present climate and most have also been running their stocks down. But that does not mean sales to farmers have fallen by the same amount," said Mr Dowdeswell, who was relatively optimistic about the future: "Although machinery sales will not be as high as the past, we have been talking to a number of farmers over the past two or three weeks and sales have begun to pick up."
The main reason farmers are not buying in significant volume is the lack of confidence resulting from low prices and the strength of the £.
"For Dowdeswell the strong £ represents a triple whammy: Its hitting the profitability of our UK farmer customers. Its helping our competitors who are importing product. And its making it more difficult for us to export," explained Mr Dowdeswell.
Despite that, his company, based at Stockton, Rugby, is continuing to focus on overseas markets. Recent successes include the Ukraine where its multi-furrow ploughs are selling well.
But Mr Dowdeswell would welcome a weaker £. "The present exchange rates are not allowing us to make the margins we have enjoyed in recent years. Although we would like to see the £ back at 2.5DM we are resigned to the fact that it will remain strong for some time," he said.
Joining the EMU would help, said Mr Dowdeswell. "Because the UK has stayed out of the Euro, the £ is being held artificially high. If we were to join, interest rates would have to come down. In reality the £ remains too attractive to overseas investors," he said.
* Latest tractor registration figures for June released by the AEA reveal that with a total of 718, the month was 27% down on the same period last year. Year to date is 42.3% down with 4665 registrations recorded.