Reaction of ZETOR TRACTORS a.s. to the development on European markets

Last year, ZETOR TRACTORS a.s. was significantly affected by the development on European markets. As a result of many circumstances, late last year, the Company was in loss and forced to adopt an adjusted plan for 2019 thus saving costs.

Since 2012, there has been fluctuant decrease in sales of farming machinery on European markets; overall sales in Europe reached their minimum. Moreover, in the latter part of 2018, markets in Central Europe unexpectedly declined as a result of extreme drought and consequent financial situation that farmers found themselves in. Merely in Poland, instead of 12,000 tractors (of all brands), only fewer than 9,000 tractors were sold. In early 2018, new legal regulations became effective establishing strict rules for the production of new tractors. The Company was forced to innovate all model ranges of ZETOR tractors. For this reason and despite all attempts, the product portfolio was limited during the first six months. The whole portfolio was available only in August. Still, there was no chance to make up for the loss.

As a manufacturer of tractors that produces smaller amount of tractors, in a global scale, ZETOR has to deal with the fact that legal regulations forces the Company to invest into innovation and development of products with only little added functional value to the customer (e.g. stricter emission standards etc.). The result is growing prices of tractors. Another thing that the Company has to face is that global players with high sales are able to launch products on different markets for such prices that are not competitive for us.

“All these circumstances had an impact on the decline in real orders by customers during last year. This resulted in increase of stock as we produced more than we could sell. For 2019, we have adjusted production plan due to the need to lower the amount of stock both in Brno and affilations. Besides, we also accepted other measures aimed at lowering total costs. One of them was also the changes in staff early this year,” says Marián Lipovský, Managing Director, ZETOR TRACTORS a.s., commenting on the situation.

In 2019, it is the priority of the Company to stabilize sales on individual markets, innovation and development of products and aftersales services and customer care. Project with growth potential which were started earlier are in further progress. Since 2016, ZETOR has been active in entering new markets mainly in the territory of Asia and Africa. Since 2017, we have been developing cooperation in the area of tractor sets supply to Russia. Since 2018, we have been cooperating with TYM Company who supplies for ZETOR tractors of the UTILIX and HORTUS model ranges by which the brand has fixed the missing part of its product portfolio in the sector of small tractors with power of 40-70 hp. However, stabilization in a new market or of a new project usually lasts for three to five years. Since August 2018, ZETOR has had a complete product portfolio and in relation of other required changes connected to legal regulations, the Company is ready to have a successful this and next year.

Despite dramatic development in 2018, the brand is still among the three biggest players on Central European markets. It is also a significant player with a well-established share on markets in Eastern Europe, Balkan, Baltic states, etc.