Impact of economic conditions on business performance


While the global economy grew by 3.3 per cent in 2014, DEUTZ increased its revenue by 5.3 per cent and its unit sales by 6.7 per cent. Unit sales outstripped revenue because a shift in the product mix towards engines with a low power output had a greater impact on revenue per unit than the rising proportion of higher-value engines. Growth across our key customer sectors has been varied and, in some cases, even negative. DEUTZ has generally been able to insulate itself from the trends in the various sectors. In 2014, DEUTZ achieved the strongest growth by application segment in Mobile Machinery, where unit sales were up by around 40 per cent, significantly outperforming the market. In view of the introduction of the EU Stage IV emissions standard for power categories below 130kW on 1 October 2014, DEUTZ sold a particularly large number of engines with capacities of less than four litres.

The economy in the eurozone experienced slight growth of 0.8 per cent in the year under review. Some of DEUTZ’s key customer sectors in this region also performed poorly. Although demand in Europe for construction equipment rose by 7 per cent according to preliminary estimates, volumes in the agricultural machinery sector declined by 8 per cent and registrations of medium and heavy-duty trucks also decreased by 8 per cent. While DEUTZ’s revenue in our biggest market – EMEA (Europe, Middle East and Africa) – remained at the same level as the previous year, unit sales were up by 3.8 per cent in 2014. US economic output grew by a relatively strong 2.4 per cent in 2014, and the North American construction equipment market grew by 8 per cent. Our unit sales in the Americas region rose by 15.4 per cent, and revenue actually increased by 34.6 per cent. China, our key international market, experienced another difficult year, with its growth rate of 7.4 per cent below that of 2013. In this environment, the markets for construction equipment and medium and heavy-duty trucks declined by 8 per cent and 9 per cent respectively. By contrast, DEUTZ’s revenue remained flat, and unit sales rose by 16.7 per cent in the Asia-Pacific region. The revenue generated by our largest equity investment in China, DEUTZ (Dalian) Engine Co., Ltd., which is not included in consolidated revenue, grew by 12.8 per cent year on year.

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