The 6.2% decrease (US$11.6 billion in 2018) was primarily driven by lower industry volumes in North America and Rest of the World markets, coupled with actions to reduce dealer inventories in the second half of the year. This was partially offset by price realisation performance across all geographies and sustained aftermarket activity.
Given the weaker industry volumes and uncertain demand, CNH Industrial CEO Hubertus Mühlhäuser reckons the company delivered creditable full-year results.
“Across all our segments, market volatility and challenging conditions persisted in the fourth quarter, offset partly by favourable mix from new products launched during 2019, cost initiatives under our Transform2Win strategy, and sustained price realisation,” he said.
Mr Mühlhäuser expects farmers’ sentiment to gradually stabilise during 2020, despite a muted industry environment in the major markets in which CNH Industrial competes, where soft commodity prices remain under pressure.
“However, in this uncertain market scenario, we will continue to manage production prudently until we see signs of improved end-market demand, especially in Q1. At the same time, we will maintain strict cost discipline and accelerate our simplification and optimisation initiatives, while continuing to invest in precision and digital farming solutions.
The agricultural division contributed the highest share of consolidated CNH Industrial revenues of $28.1 billion in 2019. The rest was largely made up by commercial and speciality vehicles (US$10.4b), powertrains (US$4.1b) and construction (US$2.7b).