CNH Industrial’s demerger translates to an enhanced focus on construction and agriculture for New Holland
While Case Construction Equipment and New Holland Construction share the same parent company, “they too often competed,” according to Scott Wine, CEO of CNH Industrial.
However, the company’s recent demerger between on-highway and off-highway machinery will allow the two OEMs to cooperate rather than compete.
In January 2022, the on-highway segment of CNH Industrial was spun-off into the separate company Iveco Group. The split has allowed CNH Industrial, parent company of Case and New Holland, to focus solely on construction and agricultural equipment.
“That business consumed a lot of our capital, and we couldn’t always invest as much as we wanted to invest in construction. We generated over $1.5 billion of cash last year, and we can spend a lot more of that expanding the portfolio for both New Holland and Case,” said Scott Wine, CEO of CNH Industrial.
“I will tell you that anybody that asks if we’re staying in construction, the answer is a resounding ‘yes’.”
As part of the enhanced focus on construction, New Holland showcased its equipment at ConExpo for the first time in 12 years. At the show, New Holland unveiled the E15X mini excavator – its first electric machine, the C330 vertical lift compact track loader and the C314 mini track loader.
“With New Holland, there is an incredible future of profitable growth. The product portfolio is expanding, and the brand is really strong,” Wine said.
“And our distribution partners have been excellent through a period of time where we probably weren’t the best owners, or the best investors, in our own construction business.”
New Holland and Case Cooperation
New Holland was founded in in 1895, while Case Construction Equipment’s history dates back more than 180 years. Wine explained the two company’s histories as separate entities meant they often would compete in the same markets. Going forward, each company will focus its effort on different market segment in different ways.
“Now that’s the difference between competing to lower margins, versus cooperating to gain market share. I think it positions us really, really well for what we can accomplish over the next several years.”
Cooperation also exists between CNH Industrial’s agricultural and construction machinery. Wine explained the construction segment shares commonality with its agriculture equipment brands, which reduces costs and improves the opportunity for higher returns.
“Much of the components that goes into a tractor are the same that go into wheel loaders,” Wine said. “So, we share engineering resources, we share supply chain resources. In some cases, we share plants.”
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New Holland is also increasing its investment in manufacturing. At its skid steer and CTL plant in Wichita, Kansas, the company has added a third production line and hired more than 150 new employees. As well, CNH Industrial is expanding its dealer network in North America specifically for the New Holland brand.
“And of course, we are investing on the electrification sides to support the needs of our customers. So, investment is the key,” said Leandro Lecheta, Head of Construction North America for CNH Industrial. “We are aggressively investing in the brand to make this business grow, taking into consideration our customer-first mission.”
Positive outlook
CNH Industrial’s CEO Scott Wine; Leandro Lecheta, Head of Construction North America; Stefano Pampalone, President of Construction; and Tyler Mills, Head of New Holland Construction North America discuss the New Holland brand during a pass conference at ConExpo.
Pre-pandemic, CNH Industrial sold about 250,000 units in Canada and the United States. Despite a dip in sales in 2020, sales increased to 275,000 units in 2021 with similar numbers recorded last year.
“This is our forecast right now, a kind of a flattish market. But in a very good level, higher than what we saw pre-COVID,” Lecheta said. “From the three to five years horizon, we don’t see these markets having some major fluctuations.”
For New Holland’s compact equipment, Lecheta is confident about the industry in North America.
Although higher interest rates may stall residential construction, he explained compact equipment use is increasing for landscaping, general construction support and in agriculture.
“We still see a very strong market for the CTLs, for the skids and especially for the mini excavator. We believe it’s going to be the core product. We’re going to see these markets evolving very, very soon,” Lecheta said.
Stefano Pampalone, President of Construction for CNH Industrial, added the post-pandemic investments in infrastructure help to build upon CNH Industrial’s positive momentum.
“We have a healthy portfolio, an enthusiastic network ready to take products and customer that have jobs to be done,” Pampalone said.
“So, I think our outlook is definitely positive.”
