CNH delaying spin-off

As part of its first quarter 2020 financial results announcement, CNH Industrial said that the original timeline for implementation of its new Transform2Win strategy, announced on Wall Street last September, that included the spin-off of the company’s on-highway activities, will be “extended” because of current market conditions.

The full first quarter results can be viewed here.

Among other items of specific interest in the Q1 announcement are the following.

Construction

In the first quarter of 2020, demand in all sub-segments of construction end-markets were showing double-digit declines in all geographies, with the exception of South America where compact and service equipment was down only 1%.

General construction equipment road building and site preparation equipment were up 12% and 13%, respectively.

Powertrain

The company’s Powertrain operations had net sales of US$753 million in the first quarter of 2020, down 27% compared to the first quarter of 2019 (down 25% on a constant currency), due to lower sales volume mainly in Europe and Rest of World as a consequence of Covid-19.

Sales to external customers accounted for 44% of total net sales (47% in the first quarter of 2019), with 27% captive volume reduction, and 33% non-captive volume reduction.

On-Highway

The European truck market was down 19% year-over-year in the first quarter, with light duty trucks down 14%, and medium and heavy trucks down 27%, with industry sales of light duty trucks and medium and heavy trucks declining 34% and 38%, respectively, in the month of March alone.

The South America truck market was down 17% in light duty trucks and 6% in medium and heavy trucks, with the light duty truck market down 26% in the month of March alone.

“At this point in time it is not possible to forecast future short and longer term demand in our key markets,” CNH said.

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