ONTHESPREE
FRENCHTRACTORBUYERSGO
ONTHESPREE
Tractor sales in France have
surged ahead of expectations,
much to the delight of
manufacturers faced with
depressed demand
elsewhere. Peter Hill looks
at how the different makes
fare in Europes biggest
tractor market
FRENCH farmers and contractors will be welcomed with open arms on to the tractor manufacturer stands at the SIMA show. Largely because, in contrast to most of their British compatriots, the farmers of France are still buying – and with some enthusiasm.
In what is already Europes biggest individual tractor market, sales have climbed (somewhat against expectations) to record levels; from a recent low of just over 23,000 in 1993 to more than 38,000 last year.
Changes in farming practice, echoing much of what has already been done in Britain, are seeing fewer workers tending larger farms. And farmers are having to make new purchases of bigger tractors and implements to make the formula work.
It helps, of course, that capital loans are available at lower interest rates and that commodity prices have held up better there than they have here. All of which means that farmers have the wherewithal to invest in more power and more modern tractors, bringing improved efficiencies to field work across a range of arable and livestock operations.
Although profitability rather than market share should be the key issue for tractor manufacturers, when pride is at stake, its those market share ups and downs that are eagerly awaited at the end of each month and, ultimately, the end of the year.
Five manufacturers account for more than three-quarters of all tractor sales in France – the multinationals Agco, Case, John Deere and New Holland, and the countrys own national marque, Renault.
The tractor manufacturing arm of the giant Renault group consistently led the home market, thanks to the enthusiastic support of partisan French farmers and one of the strongest distribution networks in the country, until the emergence of New Holland and a progressively integrated Ford/Fiat range.
Although the orange tractors have thus been demoted from their traditional top-slot position for the past four years, the fact that official registration figures continue to separate Ford, Fiatagri and New Holland models enables Renault to lay continued claim to market leadership with a record broken only in 1997 when sales dipped behind a resurgent John Deere.
Much of this was due to growers delaying purchases in anticipation of the all-new Ares range and Renault managers can at least gain satisfaction from the enormous impact it has had on sales. In a market that grew just over 4% from 1997 to 1998, the Ares contributed to Renault figures that rocketed 28% to 6370 units.
The Ares brings not only a more modern, more appealing tractor to the companys range but, more recently, has extended it into new horsepower categories. The 12-model range currently peaks at 185hp; but the plan is to go to 250hp this year.
Renault is also scoring with the comfy ride attributes of its Hydrostable cab suspension, which several manufacturers are trying to emulate, albeit with less sophisticated (and less effective?) designs.
John Deere also strengthened its position in the French market, growing sales by some 11% with the help, no doubt, of the improved 6000 and 7000 series tractors, and increased demand for tractors in the 200hp-plus category like Deeres 8000 series.
Similarly, Valmet continued its pan-European growth, albeit from a much lower level, to score more than 11% extra sales at 1342 tractors.
While Case more or less held its own in the growing French market last year, there were significant losers, not least Agcos Massey Ferguson brand which lost getting on for 10%, and New Holland whose sales dropped almost 6% to just over 6800 tractors – not quite enough to lose that prestigious market leadership.
Appearance of the French-built Massey Ferguson 6200- and 8200-series this spring should help Agcos position; and perhaps introduction of the 120hp to 150hp Rubin and Champion models will stem the 11% slide in sales of Same and Lamborghini tractors.
Demand for the Deutz-Fahr Agrotron range recovered a little from its out-of-step drop in 1996 to help maintain the Same Deutz-Fahr groups overall position in France, while fellow-Italian Landini continued its steady progress with sales growth that matched the market trend. *
Renault has big ideas on the European front…
With strong gains in domestic sales, and an investment programme that should improve manufacturing cost-efficiency and guarantee further product progress, Renault Agriculture chairman and general manager, Bruno Morange, is confident that his ambitious long-term target, of doubling market share in Europe within 10 years, can be achieved.
"Our plan for achieving our goal involves investment, totalling 1.4 bn francs £105m) over the next five years, in three important areas," he explains. "Product R&D to improve and extend our range, dealer development to strengthen distribution, and factory improvements to drive down operating costs."
The latter will build on investments that have already established more efficient cab assembly at the companys main production plant in Le Mans, and new paint facilities and extended assembly lines at Agritalia, the Carraro fruit and vineyard tractor plant in which Renault has a stake. In addition, there are new machine tool installations at GIMA, the Renault/AGCO transmissions joint-venture alongside the Massey Ferguson production plant at Beauvais.
In addition to being confident of reaching his market share goal, Mr Morange is equally confident that the business will generate sufficient shareholder value for the Renault Group to resist overtures from the multi-national manufacturers and retain its agricultural division.
"We welcome useful partnerships or joint ventures," Bruno Morange emphasises. "But we neither want to dominate or be dominated by another business."
At present, Renault Agricultures closest ties are with John Deere. The Le Mans factory supplies Deeres newly revamped 3010-series tractor (a clone of the Renault Ceres) and buys an increasing number of Deere engines from the Saran plant in France. But there is also the transmissions joint venture with AGCO and Renault distributes Claas and JCB Landpower products in France through its own retail network.
The key to Renault Agricultures continued independence is profitability; as long as 100% shareholder Renault Group is happy with the profits contribution – and the tractor maker has a good record on this count – there should less reason to sell it.
And that is why the management teams strategy has to be profitable as well as effective in gaining a firmer foothold in the European tractor market. Numbers alone will not be enough.
Tractor sales in France – total and market shares
Make 1996 1996 1997 1997 1998 1998
sales share sales share sales share
New Holland 6912 18.39% 7226 19.80% 6813 17.91%
Renault 5777 15.37% 4960 13.58% 6369 16.74%
John Deere 5393 14.35% 5166 14.15% 5746 15.11%
Agco – MF 5206 13.85% 4776 13.08% 4306 11.32%
Agco – Fendt 1658 4.41% 1953 5.35% 1984 5.22%
Agco total 6864 18.27% 6729 18.43% 6290 16.53%
Case – Case-IH 4522 12.00% 4056 11.11% 4355 11.45%
Case – Steyr 229 0.61% 292 0.80% 135 0.35%
Case total 4751 12.64% 4348 11.90% 4490 11.80%
Same/Lamborghini
/Hurlimann 2122 5.64% 2194 6.00% 1949 5.12%
Deutz-Fahr 1449 3.85% 1272 3.48% 1388 3.65%
Same Deutz-Fahr
total 3571 9.50% 3466 9.50% 3337 8.77%
Valmet 1111 2.95% 1207 3.30% 1342 3.53%
Landini 733 1.95% 991 2.71% 1032 2.71%
Zetor 391 1.04% 352 0.96% 415 1.09%
Others 2068 6.11% 2065 5.65% 2203 5.79%
Total 37571 36510 38037