(Finance) – “Our efforts to reduce inventories have been challenged by a very difficult and constantly evolving situation in the sector. However we have focused on reducing our inventory in a price-conscious mannerwhile weakness in production and retail demand will likely continue throughout the first half of 2025.” This was stated by the CEO of CNH Industrial, Gerrit Marxin the conference call on third quarter results.
“We are taking orders for 2025 models, but the trading environment remains challenging – he explained – We therefore continue to focus on cost containment and simplification of our processes in line with our new organizational structure”.
“Market conditions in 2025 indicate the need for continued prudence in spending – said Marx – We do not yet have enough information to make an exact forecast on retail demand next year. However, at this point we think 2025 could be the low point of the cycle. Whether or not we will start to see a market recovery towards the end of 2025, or if it will happen later, is unknown at this point.”
“There are many factors that will be monitoredsuch as the prices of raw materials, the speed of storage and the trend of new and used equipment, and in particular how the South American market evolves, which was the first region to decline – said the CEO – To a higher level high, we need to watch geopolitical developments, including in Ukraine and the Middle East, but also possible changes to decarbonization efforts. And how the new US administration under the President Trump will have an impact on agricultural and trade policies“.
“As we have said, we will be taking a closer look at our manufacturing footprint and our options for some realignment,” he explained. “For example, yesterday we informed our employees at one of our facilities in Iowa of our intention to permanently close and relocate the work in other CNH facilities in the United States and Europe is part of ours ongoing global initiative to streamline operations in a changing and more challenging market environment.”
Referring to Investor Day in May for precise updates on strategic initiatives, Marx highlighted that “2025 is an important year for us to launch products. Obviously I don’t like the low points of the cycle, but if there is something good it is that it is the right time to launch new products without the pressure that can exist in a market that is growing a lot in terms of demand and production” .