Monday, April 20, 2009

No wonder there are so many combines...

In inventory right now.

Agco’s sales are “dramatically reduced” in the region, because borrowing for a foreign tractor is now almost impossible, Greg Peterson, Agco’s head of investor relations, said in a telephone interview.
In its first-quarter earnings announcement in February, Moline, Illinois-based Deere said sales will decline in Central Europe and the Commonwealth of Independent States for the year. Ken Golden, a spokesman for Deere, declined to comment.
“Our main problems have been the lack of state subsidies on loans combined with insufficient operating cash and the general economic downturn, not the import tariffs,” Alexander Altynov, the general director of AgroSnab, an official John Deere dealer in Russia, said in a telephone interview.
Market Decline
Altynov predicted the foreign machinery market in Russia will decline as much as 75 percent this year.
Deere was expected to post second-quarter profit excluding certain items of $1.08 a share, the average estimate of 17 analysts in a Bloomberg survey. [More]
While I don't think this means we'll wring huge discounts from our salesperson, it does indicate the "take-a-number-and-wait" buying experience may be in hiatus for a while.

I also wonder if having geared up to provide big machines for the Eastern European market will be one more factor in what I see as accelerated consolidation here in the US.  I do know large HP tractors seem pretty cheap per HP lately.  

This is also a reminder why many in the US have a big stake in preventing protectionism from growing. 

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