The fall off in machinery sales has started to hit the margins of the big corporations as CNH announces its trading results for Q3 2024.
However, before before too many tears are shed for the industry the profit generated still remains at more or less the same level, 21.7% for Q3 in 2024 compared to 23.9% in 2023.
This might not appear too catastrophic but the profit was generated on a good deal less income, $310m this year as opposed to $540m in 2023, a fall of 43%.
Dealer stock still problematic
CNH explain the decline in Net sales of Industrial Activities as being mainly due to lower shipments thanks to a lower demand and reduced dealer inventory requirements as dealers try to clear the stock they already hold.
The company goes on to note that with the current challenging market conditions facing farmers across the globe, CNH is implementing decisions to advance its transformation journey, although it neglects to explain quite where that journey is leading and what is being transformed in the process.
Dealer inventories are still a problem, remaining elevated and they “will require additional efforts to align with retail demand.”
CNH cuts production
It is one of the most poorly kept secrets in the business that production everywhere is being scaled back is being cut with factories closing for several weeks at a time and manufacturing only kept ticking over.
CNH does not give any details of its own circumstances but admits that it “will further reduce production output to manage channel inventory”
Yet no corporation with shareholders to appease is going to let pessimism rule its reports and so CNH points to its investments in technology and quality-improving processes in a bid to position itself for the long term.
There is still one further quarter to go before 2024 is ended and due to the lower productions levels CNH is updating its 2024 outlook to show a decline of net sales of between 22% and 23% from last year, rather than the 15-20% previously forecast for both agricultural and industrial segments.
