Here is an analysis of the market advanced by Mario Danieli, Country Manager Italy of Argo Tractors, and released during a broader interview available on the website www.meccagri.it
Mario Danieli has been working for years as country manager at the Argo Tractors group and therefore boasts sector experience that places him among the most qualified managers of the moment to analyze market trends. Regarding 2024, he believes that the final results were determined by what could be defined as a ‘perfect storm’, caused by both cyclical and structural factors. “Certainly”, he states, “tax credit 4.0 has played an important role, both as a trigger for the sales boom we witnessed in 2021 and as one of the contributing causes of the current market collapse together with the reduction in the usable percentage offsetting from 50 percent in 2021 to 20 percent this year. This made the benefit less incentive.
Less income and more expenses
It should also be considered that those who signed up for the benefit, at the time of purchase, assumed that they would compensate for the accrued credit in five years, as the turnover at the time allowed them to have sufficient stair capacity. The drop in the prices of agricultural products and the adverse climatic conditions which have affected production have, however, caused the companies’ turnover to decrease, which is why the latter will take two or three more years to amortise the accrued scale credit, having to however, they will be able to cover the financing incurred for the purchase of the vehicle in five years. The above, without forgetting the escalation of energy and raw material prices which have penalized the price lists of agricultural machinery, together with the strong increases suffered by interest rates, due to the evolution of the Euribor.
Medium-high power market slow down
All this has led to a heavy decline in the market as today, only those who need to face a certain expense and those private individuals who have no interest in taking advantage of the tax credit have access to purchasing. The choices of the latter, however, are generally aimed at entry level machines, with attention focused on price. This explains why the market, which we could define as ‘essential’, continues to exist, while the market for medium-high power/specifications, where professionals are the ones who buy, has decidedly slowed down.” Creating an advantage for eastern builders. “Exactly” reiterates Danieli.
“The Italian tractor market from 2012 to today actually highlights the growth of the power range under 35 horsepower, which rose from 337 units in 2012, equal to just under two percent of the market, to a thousand 630 units registered as of December 31, 2024, equivalent to almost 11 percent of total registrations. An exploit that can be attributed mainly to a group of hobbyist buyers who do not benefit from contributions and who for budget reasons focus their attention on low-power tractors, today offered almost exclusively by oriental manufacturers. This explains how this market segment, in the past the prerogative of us Made in Italy manufacturers, is now in the hands of Asian manufacturers”.
Without concessions, recovery is difficult
The future? “Frankly, I am of the opinion that the market trend in 2025 will be aligned with that of 2024, thanks to the end of the benefits. The Ismea Innovation Fund, with a total financial allocation of 100 million euros, of which 30 for small businesses based in the areas affected by the flood of May 2023 and a minimum expenditure per project established at 70 thousand euros, will be able finance a maximum of a thousand machines in total, a drop in the ocean.
As for the Pnrr, the tractors that can be financed are only electric or biomethane powered, vehicles which, taken together, represent a negligible percentage of the current market offer. However, in my opinion, interesting business prospects are opening up for agricultural equipment given that end users who have recently replaced their tractors also based on the tax credit, with higher powers, will be able to access the resources of the Pnrr for the purchase of equipment of dimensions and technologies suitable for the new tractors. I therefore believe that in 2025 the implements will probably give dealers breathing space, while the tractor market served, excluding isodiametric tractors and vehicles with power under 35 horsepower, will remain stuck at 12 thousand machines or a little more”.
Fuller interview available on the website www.meccagri.it
Title: The tractor market is in a “perfect storm”
Translation with Google
