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Agricultural Equipment Registration in Ukraine

Agricultural Equipment Registration in Ukraine


For the moment, all leading agricultural equipment producers are present in Ukraine. Every TM has its own rep office and local dealer network. The dealer networks are being developed in such a way that distance between the customer and the service center is 150-200 km, with the service centre following all manufacture's requirements. With due account to equipment population in the region, the rep office provides for requirements to local dealer with reference to office premises, demo area, spare parts stock and service workshop. Equipment population in the region is the key need driver for spare parts and service - which pushes dealers to unofficial rivalry for the most promissing regions. Following 2012 annual results, Kharkiv, Lugansk, Poltava, Cherkasy regions became the most popular and desired Ukrainian regions - where the majority of agricultural equipment was registereed.

Lately, the import of agricultural equipment had positive dynamics and equipment population grew. The import of new agricultural equipment in 2012 ammounts at $845 mln., incl.: grain harvesters with headers (897 units – $217 mln), tractors (6730 units – $312 mln.), other equipment ($315 mln). The official dealers has 95% of the total new import volume. After retail sales, equipment go to the regions and shall be registered by the end-users in the State Technical Department (DerzhTekhNahlad).

Every single TM has different position depending on the region. "Claas" has the best sales results and is the registration leader. This TM has the best position in 7 regions (total number of registrations in Ukraine - 184 units). "John Deere" has better position in 2 regions (total number of registrations in Ukraine - 106 units). "New Holland" is the leader in 3 regions (total number of registrations in Ukraine - 87 uints). "Case IH" does not have leading position in any region, though is number two in Kyiv. It gives the picture of the TMs positions in the regions and shows efficiency of the local dealers.

The majority of big agricultural producers and leasing companies are registired in Kyiv and their offices are located there. That is the reason why such a big number of combines (238 units) are registered in the capital - almost 40% of the total registrations. After combines hand over to end-users, the balance of the TMs in the regions may differ. To compare: for 8 months 2013 there were registered 736 new grain harvesters in Ukraine. Whereby only 24% of the total registrations have Kyiv "visa". Thus, the picture of 2013 registrations is more realistis with reference to TM line-up and local dealers efficiency.

The global financial crysis put everything in place and made dealers have weighted approach to place the request and to make the payment to manufacturers. Every dealer tries to purchase the number of units, that he guarantees to sell. Naturally, some number of combines are not sold, and the dealer have some pending stock.

The unfourable weather conditions (severe drought in the South-Eastern regions of Ukraine) in 2012 made some corrections on both: harvest plan and total annual combines import. By the end of the year the dealers had 314 units of unsold combines - more than 35% of the general import. That led to lesser import at the beginning of 2013 year and tough price rivalry between the dealers. The market conditions allowed customers purchase combines (at lowest prices) from one dealer, and go into service contract with another dealer.

The given policy - to lower price rates - is not efficient, due to financial growth potential becomes not available, it may not follow TM positioning, may lead to market lost and sales decrease. Hence, shall be managed by national representative office.

To estimate the dealer efficiency, both long- and short-term indicators shall be used, where sales volume is the key-indicator. The equipment registration analysis allows to estimate short-term efficiency of the local dealers and identify TM line-up

To purchase the detailed up-to-date equipment registration report, feel free to approach MARCOM manager: vb@marcom.kiev.ua