Key Takeaways for Decision Makers
FINANCE: John Deere will most likely continue to dominate the market share for 2016.
RENTER/SELLER: Keep an eye on competition between Vermeer and Case IH as Vermeer has slowly climbed year over year, while Case IH showed a somewhat dramatic decline between 2014 and 2015. It will be interesting to see which manufacturer is ahead for 2016.
Knowing how the market share of a particular industry is divided provides vital information regarding the profitability and competitiveness of manufacturers for that industry. Manufacturers that maintain a majority of the market share also maintain an upper hand over competition, along with greater profitability in the market. To determine which manufacturers occupy the market share for balers, we collected sales records of asking price from our EquipmentWatch Values data for the top five manufacturers for July 2013 (1,129), 2014 (4,284), and 2015 (2,382).
Positions held between manufacturers appeared to remain constant, with John Deere leading with an average of 51.1% of the baler market share. Deere maintained this majority share of the market, also showing the greatest variance year over year, by occupying 66.8% in 2013, 36.7% in 2014, and 49.9% in 2015. New Holland occupied 15.9% in 2013, with a significant increase in 2014 to 27.9%, before settling to 26.9% for 2015. John Deere’s market share decrease for July 2014 was most likely on account of the overall decline the farming economy during 2014, which resulted in overall lower profits for agricultural equipment. Since manufacturers with higher market share experience growth and decline at the same rate as the overall market, this could be reflected in John Deere’s July 2014 occupation of baler market share. In 2015, the demand for agricultural and construction equipment was still lower than in 2013. However; Q3/15 was still profitable, which could account for why Deere’s baler market share increased between July 2014 and July 2015, but was still 16.9% lower than 2013.
Despite Case IH and New Holland having been part of CNH Industries for around 15 years, the two manufacturers maintained significantly different positions of the market share, with Case IH occupying only 4.0% in 2013, jumping up to 10.1% in 2014, and then decreasing to 6.5% in 2015. When looking at the average percentage of market share occupied by the merged organizations, Case IH occupied an average of 6.9%, while New Holland occupied a much larger value of 23.6%. AGCO occupied 7.0% in 2013, spiked to 17.0% in 2014, dropping to 9.2% for 2015. Vermeer occupied the smallest percentage of the market across the board, with only 4.8% in 2013, increasing slightly to 5.1% in 2014, and settling at 5.5% for 2015. While Vermeer has maintained the smallest amount of market share of the top five baler manufacturers, it is also the only manufacturer that has shown continuous year over year improvement.
If current available data is indicative for the July 2016 baler market share, positions held by each manufacturer will largely remain constant. The only possible exceptions are Vermeer and Case IH. Vermeer, which occupied an average of 5.1% with subtle but steady improvement year over year, is likely to improve its market position next year. Case IH showed remarkable volatility, occupying an average of 6.9% yet spiking to 10.1% in 2014, and dropping 3.6% in 2015. If these figures are indicators for July 2016, expect Case IH and Vermeer to continue competing with one another.
It is worth noting that more data was available for July 2014, with 4,420 sales records, as opposed to 1,149 in July 2013 and 2,431 in July 2015. The fact that despite the presence of such variance, each manufacturer maintains a consistent percentage of the market share could still be telling of future trends in the market for used balers.