Chrysler 2007 Annual Report Download - page 74

Report on Operations CNH
Operating Performance
In 2007 the global market for agricultural equipment grew by
2% from 2006. Overall demand for tractors rose 2% due to the
positive performance recorded in North America (+1%, with
demand for 40+ horsepower tractors higher by 7%), in Western
Europe (+3%) and the sharp increase posted in Latin America
(+39%), against a decline in the Rest of the World countries
(-3%). The combine harvesters market recorded a brilliant
performance (+21% overall) with increases across all
geographic areas: +13% in North America, +85% in Latin
America, + 4% in Western Europe and + 21% in the Rest of the
World countries.
All CNH brands gained market share, with particularly
significant improvements in combines and high horsepower
tractors.
In 2007, deliveries of CNH tractors to the dealer network
increased in all markets with respect to the previous year,
outperforming market increases; a particularly positive trend
was recorded for 40+ horsepower tractors (which represent
the core segment for CNH in the agricultural equipment
segment). Deliveries of combine harvesters to the dealer
network also rose significantly, with sharp increases across all
geographic areas and growth rates higher than market
increases.
The global market for construction equipment rose by 13%
from 2006: demand grew significantly across all geographic
areas with the exception of North America, where it declined
by 12%. Higher demand for backhoe loaders (+26% overall
from 2006) and heavy equipment (+16%) in the other areas
more than offset the decrease in North America, while the
decline recorded in this area for skid steer loaders negatively
impacted global demand which decreased by 2%,
notwithstanding the positive performance reported in other
areas.
Against this background, worldwide CNH construction
equipment deliveries to the network increased with respect to
2006. The sharp increases in volumes recorded in Latin
America, Western Europe and in the Rest of the World countries
more than offset the decline, in line with the unfavourable
performance of the market, reported in North America.
Innovation and Products
The strong commitment to innovation and steady improvement
in product quality allowed CNH to revamp and enlarge its
product line, introducing new models for the four global
brands with which it operates. This commitment was
recognized by the many and important awards it received in
2007.
During the year, New Holland Agriculture launched two
important tractor lines in the 100-213 engine horsepower
range, the T6000 Series and T7000 Series. The T7000 Series
tractor was particularly well received by customers thanks
to its productivity, manoeuvrability and the comfort of
its cabin. This tractor also won the prestigious ”Tractor of
the Year” and “Golden Tractor for Design” awards at
Agritechnica 2007, the German exhibition for agricultural
machinery.
At the same exhibition, the FR9000 forage harvester won the
“Machine of the Year” award (later joined by the “Golden Ear”
award received at the International Agriculture fair in Brussels)
while the CR 9000 Elevation combine won medals for
innovation.
The brand also launched the T9000 Series 4-wheel-drive
tractors, the T8000 Series row crop tractors in the 175 to 270
engine horsepower range, and the BR7000 round balers.
In China, the brand launched the T5600 Series tractors featuring
characteristics that meet the increasing demand of the Chinese
market for more efficient and advanced machinery. These
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Agricultural and Construction Equipment
CNH - Case New Holland
Highlights
(in millions of euros) 2007 2006
Net revenues 11,843 10,527
Trading profit 990 737
Operating result (*) 953 592
Investments in tangible and intangible assets 648 394
- of which capitalised R&D costs 92 79
Total R&D expenses (**) 308 289
Employees at year-end (number) 28,173 25,335
(*) Including restructuring costs and unusual income (expenses).
(**) Including R&D capitalised and charged to operations.