Case New Holland (CNH) has reported a dramatic fall in sales for the first quarter (Q1) of 2025, with consolidated revenues being $3.83 billion (down 21% compared to Q1 2024), and net sales of industrial activities falling to $3.17 billion (down 23% compared to Q1 2024).
As usual, the company is putting on a brave face regarding the situation, with chief executive officer Gerrit Marx noting that CNH’s focus on reducing dealer inventories and managing costs has positioned it to weather the current macroeconomic uncertainties.
However, this has been the course that all manufacturers have been following over the last year or so, as factories have slowed in response to a lag in orders.
Squeezing out the surplus
Reducing the number of machines in the pipeline would appear to make sense as it releases capital that is bound up in stock, and with many dealers having to finance their stock through borrowing, there is a strong motivation to decrease inventories.
This approach also allows new models to reach the market must more swiftly without having to wait for older machines to clear dealers’ yards, thus presenting a brand as dynamic and modern rather than hanging around in the doldrums.
However, there is something of a paradox developing, as dealers who Agriland has spoken to in the recent past are not quite as despondent as the sales figures suggest they should be.
Dealers have indicated that forward orders have been placed though – with the lead time often being two or three months – it will be early summer before this activity shows in the registration figures, although nobody is claiming a great surge in sales is taking place.
Sales fall in all regions
CNH also points to what it describes as its balanced global exposure, meaning that while one market may be down another may be up.
However, the depression in machinery sales appears to be a global phenomenon with tractor sales in Brazil falling 11% in March compared with the same month in 2024.
There is little joy to be discerned in the corporation’s outlook for 2025, with a forecast for the agriculture segment’s net sales being down between 12% and 20% year-on-year.
The company is preparing to tough it out for another year.
