annual report - FIAT SpA

AGRICULTURAL AND CONSTRUCTION EQUIPMENT
CNH – Case New Holland
COMMERCIAL PERFORMANCE
Highlights
In 2010, worldwide agricultural industry
(€ million) 2010 2009
retail unit sales increased 8% over the prior
year with improvements in all regions except Net revenues 11,906 10,107
Western Europe, where demand remained
Trading profit/(loss) 755 337
below historical norms. Global demand was
up 8% for tractors and 2% for combines. In Operating profit/(loss) (*) 754 251
North America, tractor sales increased 5%
Investments in tangible and intangible assets (**) 446 330
and combine sales were up 9% on the back
of strong commodity prices and very solid of which capitalized R&D costs 200 151
farm income. In Latin America, tractor sales
Total R&D expenditure (***) 346 283
climbed 20% and combine sales jumped
29% on strong economic fundamentals and No. of employees at year end 28,831 28,466
stability in government support for the (*) Includes restructuring costs and other unusual income/(expense)
agricultural sector. Western European (**) Net of vehicles leased out
markets declined for the year with tractor (***) Includes capitalized R&D and R&D charged directly to the income statement
sales down 9% and combines falling 29%.
There were signs of a recovery in demand in the fourth quarter with tractor sales increasing 12% over the same period
in 2009. Rest of World markets reported a 13% growth in tractor sales and a 3% increase for combines.
CNH's global market share for tractors was largely in line with the prior year. The sector maintained share in Western
Europe, despite the decline for the industry overall, and experienced a slight decrease in North America for under 40
hp and mid-sized utility tractors as it transitioned to new, more competitive products. CNH improved global share of the
combine market driven by strong performance in Rest of World markets.
Global construction equipment industry unit sales rose 47% for the year, representing a recovery from the low base
experienced in 2009. The market for light equipment was up 35% and the heavy segment rose 59%. In North America,
demand improved 20% for light equipment and 14% for heavy equipment principally due to replacement of ageing
fleets. In Western Europe, demand grew as the industry began to recover from the prior year's low levels, and unit
sales were up 23% for light equipment and 17% in the heavy segment. In Latin America, strong market performance
was mainly driven by increased infrastructure spending, with sales growing 89% in the light equipment segment and
86% in heavy. In Rest of World markets, industry sales rose 50% for light equipment and 71% for heavy, driven by
continued strong demand in the Asia-Pacific region, primarily in the heavy equipment segment in China.
CNH’s full year market share was in line with growth in demand across all segments and regions with the exception of
Latin America, which was down due to local manufacturing capacity constraints for CNH for both light and heavy
equipment. Plans to expand capacity were initiated at two facilities to accommodate future market growth and ensure
targets for localization of production can be met.
CNH and KAMAZ finalized a joint venture agreement for the production of agricultural and construction equipment in
the Russian Federation. This followed a preliminary agreement signed in October 2009. Once fully operational, CNH-
KAMAZ Industry will have an annual production capacity of 4,000 units.
INNOVATION AND PRODUCTS
In North America, Case IH Agriculture launched the next generation of more powerful and fuel-efficient Steiger® and
MAGNUM tractors, along with a new range Puma 130-160 series models with Continuous Variable Transmission
(CVT). All models meet Tier 4A/Stage IIIB emission standards. In the US, the brand also released the new Farmall A
series of tractors. In Brazil, Case IH launched new Axial-Flow combines, the Magnum 335 tractor and the Maxxum
tractor with extended axle. Sale of the new Austoft 4000 sugar cane harvester was extended to Africa, India, Southeast
Asia and China.
New Holland Agriculture launched the new T7, T8 and T9 tractors with Tier 4A/Stage IIIB-compliant Selective
Catalytic Reduction (SCR) engines, as well as the new Braud 9000L grape harvester. The brand also introduced the
Blue Power T7070 Auto Command and T7060 Power Command tractors in Europe and North America. In Europe, the
6-cylinder, 116 to 140 hp, T6000 Elite light-weight tractor, featuring electronic power management with power boost,
was also launched. And in North America, the hydrogen-fueled NH2 tractor made its debut.
Case Construction launched four new N Series loader backhoes in North America and a range of four Construction
King T Series tractor loader backhoes in Europe. Case Construction’s 650L crawler dozer was named one of the “Top
20 Rollouts” of 2009 by Better Roads magazine. Trade press also presented Case Construction with an “Excellence in
Equipment Engineering” award in the loader backhoe category for the 590 Super M+ Series 3 loader backhoe and
Report on Operations CNH 86