CNH Industrial Q1 2025: Sales Drop By 22% In Q1

The construction equipment market got off to a bumpy start in 2025. In its Q1 earnings report, CNH Industrial said global construction equipment revenue fell 22% year-over-year to $591 million. 

That sharp drop came due to the collapsing demand and an industry “destocking” cycle. Margins took a hit too: first-quarter gross profit in construction dropped from 17.4% a year earlier to 14.9% and adjusted EBIT plunged 73% (to just $14 million). 

In plain terms, builders and dealers simply aren’t ordering as many new machines, and that is squeezing profits across the board.

Why the drop? Demand slump and dealer destocking

Several factors are converging to cool equipment sales. On the demand side, the data point to weaker construction activity worldwide. 

CNH noted that in Q1 heavy construction equipment volumes were flat (up 2% globally), while “light” equipment volumes fell 6%. North America, the most important market for many dealers, saw an 11% decline in construction equipment demand. 

Europe, the Middle East and Africa were down 9%, South America 1%, though Asia Pacific grew about 7%. 

In short, aside from pockets of growth abroad, the near-term outlook is dimmer: CNH now expects construction equipment sales to be lower in 2025 than in 2024, even after factoring in planned cuts to production.

On the supply side, manufacturers and dealers are finally cutting production to clear the logjam of inventory. 

After a post-pandemic boom left lots overstocked, CNH and others have slowed plant output (some cutting shifts or freezing hiring) to let the market absorb excess machines. 

Overall, CNH attributed the 22% sales decline to “lower shipment volumes driven by the market decline”. 

In other words, fewer orders were placed and filled in Q1. This hit spread through the profit chain: weaker pricing and volume meant EBIT margins in construction tumbled from 6.7% to 2.4%.

Impact on the used equipment market

For used equipment dealers and contractors, a slump in new sales usually means one of two things, either more gently used construction machinery may come to market as firms delay upgrades, or prices may slide as buyers hold off. 

Recent industry reports suggest it’s a bit of both. Sandhills data show used construction-equipment asking and auction prices drifting down in many segments as inventory levels remain elevated. 

At the same time, there is still steady demand for high-quality, late-model machines. 

In practice, this means buyers are picky, older, high-hour units may sit on the market longer or need price cuts, while relatively new machines (with low hours and attachments) tend to sell faster. 

Sellers should price accordingly. Monitor reports advise keeping an eye on economic and policy changes (like tariffs or commodity swings) that could affect demand – things like these “were reasonable six months ago, but may no longer be competitive”.

Is there any impact on trade tariffs and global uncertainty

One big projection is geopolitical trade uncertainty. In its call, CNH warned that any ramp-up or expansion of tariffs (for example, those announced by the U.S. on European imports) could change the outlook materially. 

The company is modeling scenarios where current tariffs remain all year, or even increase as of mid-2025. 

This has dealers on edge in North America, where CNH’s brands are built, because higher costs may arrive without warning. 

To mitigate, CNH said it was “sharing the tariff cost impact with our supply base” and even adjusting pricing on new orders in North America.

For U.S. dealers and contractors, the takeaway is that equipment already carries premiums from recent tariffs, so any further hikes could squeeze budgets or push them into the used market. 

Is relief coming in 2025?

Interestingly, not all the signs are gloomy. Some industry analysts say late 2025 could see a rebalancing. The Federal Reserve has started cutting interest rates, which will gradually reduce financing costs. 

Federal infrastructure spending (from the 2021 IIJA program) is still ramping up, promising plenty of road and building projects that will need equipment. 

However, CNH itself is bracing for a down year. The company’s outlook calls for 2025 construction sales to drop an additional 4–15% from 2024, depending on how tariffs and end markets evolve. 

They plan to keep production low and continue cost cuts to protect margins. For dealers, that means new-gear availability will be deliberately limited (which could make the ones on hand more valuable). 

It also means CNH is likely to keep working with dealer networks, supporting promotions, handling “reciprocated information” and training to sell through older stock.

Key takeaways for dealers and contractors

Q1 Results: CNH’s construction segment saw a sharp slowdown, 22% sales drop year-on-year. If you sell or buy CNH equipment, expect fewer new units hitting dealers and more aggressive pricing on existing stock.

Inventory drain

Dealers have been reducing their backlogs. CNH CEO Marx emphasized efforts to clear aged stock and tighten inventory. Contractors should still find deals on end-of-line 2024 models as dealers seek to make room.

Tariff watch

Ongoing trade tensions could reshape pricing and availability. Both sellers and buyers should stay alert on tariff news, as impacts may show up suddenly in summer 2025.

Used equipment market

The used-equipment market is mixed. Look for price pressure on older used machines and relatively stable values on late-model, low-hour units. Financing terms and warranties are key selling points as buyers compare with new-equipment offers.

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