Construction Equipment Internal Sales in Brazil from January thru May grew 35% over the same period of 2019. The Brazilian Machinery Builders´ Association (ABIMAQ) expects 2020 sales to hit 20,000 machines, 15% more than in 2019.
PSR Analysis: The Construction segment was the less affected by the pandemic than some other segments. The interest reduction directed investment to real state, especially housing, and some measures, such as the new regulation for sanitation, recently approved by the parliament, will boost the Construction business in 2020 and more significantly in the coming years. PSR
This information comes from industry interviews and from two proprietary databases maintained by Power Systems Research: EnginLink™ , which provides information on engines, and OE Link™, a database of equipment manufacturers.
COVID-19 continues to batter production of off-highway equipment as we continue to move through 2020. The effects of the virus on Agricultural and Construction equipment production in North America were analyzed in a June 17 webinar presented by the Heavy Duty Manufacturers Association (HDMA) and Power Systems Research (PSR). The webinar updated information presented in PSR’s webinar in April.
Jim Downey
The PSR webinar team was Jim Downey, PSR vice president-global data products , and Yosyf Sherementa, PhD, PSR director-product management and customer experience.
PSR projects AG to be down 9.4% and CN to be down 11.3% when comparing global production for this year (2020) to last year (2019).
China and India which have the largest volumes for ag machinery are the lower side for production percentage drops this year. China which is also the largest producer of construction equipment is not expecting a decline this year.
Yosyf Sheremeta
A slight recovery for Construction equipment is expected in 2021, but not until 2022 for Agricultural machinery. Ag sector recovery will ultimately depend on overall economic recovery from the COVID-19 pandemic.
The construction segment will not return to pre-virus production volumes for another few years, at best. We’re looking out to 2024 or possibly 2025 to get back to 1.48 million units.
We don’t see a V-shaped type scenario on the horizon in North America, but rather recovery will look like something between a “U” and an “L.” Somewhat of a swoosh shape or upward sloping L. Economic activity will slowly return to a sense of normalcy as the curve of new COVID-19 cases flattens.
Government support and intervention will be needed, and stimulus will provide an economic backstop. We expect modest growth in 2021. Pent-up demand and continued economic stimulus should also help with rebound.
John Deere announced the start of production of G series of Graders in Brazil in the coming months. It had previously imported these units. With the movement, John Deere will attend the South American Market with 90% of products made in Brazil.
PSR Analysis: The decision of nationalization started in 2018 and makes more sense with recent local currency depreciation. With this movement, Deere will be more competitive in delivery time and it will have some room for margins and pricing variation, what will lead to a moderate growth of share in the market, what is already reflected in our databases forecast.
Power Systems Research will work with the Heavy Duty Manufacturers Association (HDMA.org) to present a one-hour webinar examining the impact of COVID-19 on the industrial segments of Agricultural and Construction in North America.
The webinar will be presented Wednesday, June 17. Watch hdma.org and powersys.com for details. PSR
Production has resumed in ARGO Tractors plants after being shut down for almost two months. Different measures were put in place in order to comply with government health regulations. In April ARGO started to sanitize the factories and prepare to resume operations. Protection equipment is distributed to workers who must keep social distancing and whose temperature is registered at the entrance of the factories.
PSR Analysis: The prolonged halt in production and the continuous uncertainty related to the development of the coronavirus pandemic had a significant impact on the global agricultural industry and on ARGO tractor volumes. Despite that, with the re-opening of the production lines the Italian OEM was able to address the orderbook received before the start of the lockdown, and at the same time, collect new orders.
According to our forecast, we expect production to be down 16% this year. However, this performance might turn a bit less bitter if the current pandemic evolution does not result in a second wave of lockdowns in the coming months. PSR
Emiliano Marzoli is Senior-Business Development Manager-Europe
Japanese OEMs are struggling to adapt to the COVID-19 problem. Plants are being temporarily shut down and production adjustments are being made.
Akihiro Komuro
While domestic plants are generally operating quietly, overseas bases are being affected in various ways, depending on the country. Here is a summary of announcements by the major companies.
As of today, India is relatively less impacted by COVID than other nations. Because of the very bold and unprecedented move of a complete lockdown for about 40 days, India has managed to restrict the number of positive cases to 17,000.
Ritvik Kulkarni
Considering that India is a country with a population of over 1 billion persons living in challenging on-ground conditions, it is a phenomenal effort of proactive and timely response from the government as well as restraint observed by citizens.
This information comes from industry interviews and from two proprietary databases maintained by Power Systems Research: EnginLink™ , which provides information on engines, and OE Link™, a database of equipment manufacturers.
Haval, the Chinese manufacturer, said it plans to build its own
engine plant in the Tula region of Russia. Work is scheduled start this month (March
2020). The planned investment in the project is US$ 270 million. This information
comes from press-service of Haval Motor Rus.
Maxim Sakov
It’s expected that the new plant will produce 80,000 engines
annually, increasing the localization level of SUVs by several thousand units
annually. Total personnel number in automotive plant exceeds 1000 people. Read
The Article
PSR Analysis: The first Russian Haval plant opened in May of 2019. Current production capacity is 80 Haval SUVs. The plant will be located on a 10,000 sq.m. site next to the Haval automotive plant. It will provide more than 300 jobs.
Claas is Shifts Production of Tucano 320 Harvester To Russia.
In April 2020, Russian plant Claas in Krasnodar will start
producing the Tucano 320 grain combine. During the first two years, this model
will be produced simultaneously in Germany and in Russia. Beginning in 2022,
the plant in Krasnodar will became the sole maker for this model. The move
opens opportunities to increase production and export volumes for the Russian
plant.
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