At the announcement of the CNH Industrial’s second quarter financial results, Suzanne Heywood, Chair and Acting Chief Executive Officer of CNH Industrial, said: “CNH Industrial has managed to navigate successfully the rapidly evolving end-market conditions of this second quarter. By May we had all our plants and depots back up and running with new COVID health and safety protocols fully implemented. This meant that we were well positioned to supply products into end-markets that strengthened ahead of expectations, enabling us to deliver better than expected business performance with modest free cash flow generation.
“Our results were also supported by the actions (amounting to approximately $500 million in the first six months of the year) taken to preserve cash and manage working capital. We move into the second half of 2020 with $11.5 billion of liquidity, the highest in our history, which gives us a solid foundation from which we can navigate this still uncertain and challenging period.
“As we do this, we will continue to prioritize looking after our people, supporting our dealers and customers and managing our supply chain. In addition, we are gradually restarting our preparation for the spin-off of our on-highway business and we will keep our stakeholders updated about progress and timeline. We are also working on plans to reposition our construction business for profitable growth.
“Our investments in digital and alternative fuel technologies continue to advance, including through our partnership with NIKOLA. I would like to thank all of my colleagues across CNH Industrial as well as our extraordinary dealers for their huge efforts to keep people safe during the first half of this very challenging year while also meeting the needs of our customers who operate in so many essential end markets.”
During the second quarter of 2020, the COVID-19 pandemic continued to negatively impact most of CNH Industrial’s end-markets and operations, according to the recent company report.
Worldwide agriculture industry demand was muted during the second quarter of 2020, with global demand for tractors down 1% and combines up 12%. In North America, tractor demand was up 20% in the quarter for the lower horsepower segment (under 140 HP), while demand was down 22% for high horsepower tractors (over 140 HP); combines were up 3%. In Europe, tractor and combine markets were down 25% and 23%, respectively.
South America tractor markets decreased 10% and combine markets increased 29% compared to the same quarter in the prior year. In Rest of World, demand decreased 3% for tractors and increased 21% for combines.
In the second quarter of 2020, demand in all sub-segments of construction end-markets were showing double digit declines in all geographies, with the exception of Rest of World where general construction equipment was up 28%, while compact and service equipment and road building and site preparation equipment were both flat.
The European truck market was down 39% year-over-year in the second quarter, with light duty trucks down 29%, and medium and heavy trucks down 57%. The South America truck market was down 39% in light duty trucks and 28% in medium and heavy trucks. For buses, the European market decreased 57% in the quarter, and the South American market decreased by 62%.