A TRUE CATASTROPHE
Felt around the world
by Service Dealer Editor, Steve Gibbs
 
Steve Gibbs

We will all have been appalled and deeply saddened at the images seen this week, coming out of Ukraine. Utterly sickening and completely heartbreaking. The barbarity on display is shocking to the core.

 

As a consequence, the humanitarian crisis that is unfolding is almost too tragic to comprehend - and is something that I feel in no way qualified to comment on. I did however, read a take on the implications of the situation this week, that considered how the events might directly effect the worldwide land-based machinery industry. Whilst of course trivial compared to the stories we're seeing each night on our televisions, is it of undeniable significance to our industry.

 

The statement came from the FederUnacoma, who are the Italian agricultural machinery manufacturers federation - their equivalent of our AEA. In discussing the outlook for the global agricultural machinery sector for this year they said:

 

"The forecasts for 2022 formulated at the beginning of the year are positive, but the Russian-Ukrainian military crisis is changing the scenario, and threatens to heavily influence the global economy."

 

The above statement was actually within a piece where the federation is discussing what a strong place the agricultural machinery sector currently finds itself in. "The global agricultural machinery market continues its positive phase," is how they put it. Which when one considers that we are just beginning to emerge from two years of a global pandemic, is quite remarkable.

 

Their evidence for this claim of a worldwide positive phase for ag machinery is compelling. They say that tractor sales - which in 2020, at the height of the pandemic, had already recorded a global increase of 7.7% to 2,200,000 units - recorded further increases in 2021 in countries across the globe.

 

They say the United States closed the year with a total of 318,000 tractors registered, up more than 10% compared to 288,000 the previous year. They also describe the Indian market as "consolidating its supremacy" in terms of units sold by exceeding 900,000, an increase of 13%.

 

The FederUnacoma believe high levels should have been reached by the Chinese market too, for which the final 2021 figures are apparently not yet available but which already recorded a record increase in 2020 (+47% against 470,000 units sold). They go on to report that the European market is also in the black, with an average increase of 16.6% with almost 180,000 units registered compared to 154,000 the previous year. 

 

For the UK specifically, we heard from the AEA just recently who confirmed that 2021's full year tractor sales were up on 2020. The total number of machines registered during the year was 12,017, which the association's agricultural economist, Stephen Howarth confirmed was " . .16% higher than in 2020 but very close to the size of the market in each of the three years before that."

 

Further global supply chain worries

 

Despite these encouraging figures, a salient point that Stephen goes on to make in that story linked to above, was in regard to the global supply chain. When commenting on the increase seen in sales, he said, "It is likely that registrations would have been higher still were it not for disruptions to global supply chains, which led to an increase in delivery lead times for a wide range of manufactured products, including tractors."

 

Everyone in our sector is still acutely feeling the effects that the pandemic has had on delivery of stock. The way that production and shipment of wholegoods and components around the world is so intrinsically interconnected in the modern age, has been highlighted by empty shelves and waiting customers. Almost regardless of where a machine is principally manufactured, if there's disruption in the chain, the bumps are inevitably felt somewhere down the line.

 

Now with the invasion of Ukraine by Russia, there is another, horrific, disruption to the natural movement of the world's economy.

 

As well as this, it does also make the world's marketplace that much smaller - with these two huge agricultural nations removed from trade. Nations that in recent years, many of the large agricultural machinery suppliers have been making inroads into.

 

Interestingly today, on our friend Chris Biddle's podcast he is talking to some industry colleagues who have done business with Russia and Ukraine. It's very hard to get your head around the moment when James Tuckwell of Tuckwells describes receiving text messages this week from one his customers in Ukraine whom he has done plenty of business with, but who is now out in the street fighting for his country and presumably his life.

 

Unclear future

 

Going back to that statement from FederUnacoma, they conclude by saying " . .the Russian-Ukrainian military crisis is now a very influential variable for the economy as a whole, with effects that are still difficult to measure."

 

Whilst the outcome is unclear, it cannot be described as anything other than worrying. Besides the dreadful human costs, around the globe price rises in raw materials, gas, fuel etc all seem inevitable now. 

 

As the past two years have made abundantly evident, we are living and working in a truly worldwide economy. The consequences of catastrophic events are felt everywhere.

 

And what we're seeing play out in Ukraine, is a true catastrophe on every level.

In this issue
EDITOR'S BLOG
A TRUE CATASTROPHE
NEWS
YAMAHA ATV PARTING COMPANY WITH SOME DEALERS
RETIREMENT AFTER ALMOST 50 YEARS
SENIOR LEADERSHIP APPOINTMENT
FUTURE FOR AGRI-TURF DEALERSHIPS?
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SALES OFFERED FOR FIRST TIME
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