Prices for harvesting machinery will continue to increase due to rising global demand and input costs
Los Angeles, CA (PRWEB) March 02, 2014
Harvesting machinery has a buyer score of 2.4 out of 5. The buyer score represents the purchasing power buyers have and how effectively they can negotiate prices. According to IBISWorld procurement analyst Erick Delgado, “this market's buyer score shows that suppliers are relatively inflexible with their prices.” Factors that negatively affect buyer power include a low availability of substitutes and high market share concentration. Factors that positively affect buyer power are moderate price increases and low price volatility.
The market for harvesting machinery is dominated by a few large firms who build highly specialized products that do not have any direct substitutes. “This contributes to the industry having a high level of market share concentration,” say Delgado. The major players have increased their market share and expanded their customer base over the past three years by acquiring small manufacturers. Buyer power will further diminish as firms continue with this strategy.
Prices for harvesting machinery have increased at modest levels over the past three years. The rising cost of inputs, higher emission standards, and increased global demand have contributed to price increases. Manufacturers have struggled to forecast their input costs because of the volatility in steel prices. This uncertainty has caused producers to keep their prices high to avoid a reduction in profits. Regulation has forced suppliers to produce more fuel-efficient machines with lower emissions, increasing their research and development (R&D) expenses and overall cost to manufacture. These conditions are expected to cause an increase in prices during the next three years to 2016, which will make it harder for buyers to negotiate prices down. The four largest vendors in the market are CNH Global N.V., Deere & Company, AGCO Corporation, and CLAAS Group.
For more information, visit IBISWorld’s Harvesting Machinery procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of harvesting machinery, which is sold through manufacturers and wholesalers. Harvesting machinery consists of a wide variety of manufactured agricultural and farm equipment, including combines, mowers and windrowers, pickers, dryers, balers and gins. This report does not cover fertilizing and planting machines, windmills, mowers for lawns and parks, and residential gardening or landscaping machines.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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