(Bloomberg) -- Farm machinery manufacturers are seeing glimmers of a recovery in Asia Pacific — the first region to slump and now the first to show signs of a pickup in business.
AGCO Corp., which manufactures tractors and crop combines under brands including Fendt and Massey Ferguson, is trying to get more inventory to the APAC region after an increase in orders. Rival manufacturer CNH Industrial NV, meanwhile, views India as a highly promising market.
“We’re starting to see some early signs of recovery already in our Australia-New Zealand market,” AGCO Chief Executive Officer Eric Hansotia said on a call with investors. “We’re starting to see them finding a bottom and maybe even recovering a little bit.”
The sector overall remains under significant pressure with abundant global crop supplies weighing on prices, squeezing farmers and leaving them less to spend on new equipment. And while the region is a bright spot, it’s smaller than markets in North America and South America, which are mired in an overabundance of corn and soybeans that is clouding the outlook for 2025.
AGCO’s worldwide sales in the second quarter were down 15%, prompting the company to slash its annual sales outlook by $1 billion.
CNH likewise trimmed its outlook, predicting sales of combine harvesters in the key North American market will fall 15% to 20% this year, down from earlier guidance of a 10% to 15% decline. The APAC region is seen faring better, with combine sales likely to be flat this year.
India presents “massive potential,” according to Gerrit Marx, who recently took over as CEO. Marx this week appointed a president of India along with other regional heads, to recognize the country’s strategic importance.
“India for agriculture is probably comparable to China as it was 15 years ago for the passenger-car industry,” he said Wednesday on a call with investors.
CNH shares climbed as much as 5.8%, the most since February, after the company reported second-quarter results that topped analyst estimates.
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