Agricultural mechanics: components prevail in the district of Turin

Always polarized on automotive industry, the province of Turin in Piedmont is one that, after Cuneo, can boast the highest specialization in the field of agricultural machinery with a high prevalence of the components. The focus is on businesses in the agro-energy sector

It was the engine from which, in the 1800s, took their lifeblood, under the flag of the Savoy dynasty, the Risorgimento and the Kingdom of Italy. It was, for three years, the first capital of a country reunified in 1861 after centuries of division and fratricidal wars. And even when it relinquished the political leadership – first in Florence and then in Rome, after the breach of Porta Pia – Turin has continued to play a prominent role in Italy, becoming the centre of the Italian industry. In fact, it was in Turin that, between the late '800s and early '900s, saw the light crucial joints (past and present) of the Italian manufacturing system: The National Society “Officine di Savigliano” in the railway sector; Lavazza, Ferrero and Martini in the agri-food sector; Olivetti in the typewriters sector (now IT) and the Ceat (Electrical Cables and Allied Products of Turin) in the segment of cables and tires. But most of all it was in Turin that, on July 11 1899, with the establishment of the “Società Anonima Fabbrica Automobili”, Italian car industry was born. A few months later was inaugurated the first Fiat model, a car produced in twenty-six specimens – the 4 Hp –  equipped with a rear two-cylinder 657 cc engine capable of delivering 4.5 horsepower and of reaching speeds of up to 35 km/h. For the enterprise guided by the Agnellis, the automotive industry, without ever losing its centrality, represented the point from which the company diversified its production activities with the aim to establish itself in other markets. Among them, just to name a few, are the aircraft (with the 1908 debute with the engine SA 8/75), agriculture – the range of Fiat tractors was born in 1919 with the 702 model – railways (the famous "Pendolino" was signed by Fiat Ferroviaria) and heavy earth-moving machinery, which still constitutes, together with agricultural mechanics, a flagship of CNH Industrial (formerly Fiat Industrial).

 

Not only automotive: Turin capital of technological innovation

The leading position in the Italian industry transformed Fiat in a sort of metronome that would have marked the times of the economic change and the social and cultural development of the country. In short, from July 11 1899, the team from Turin and the "Italian system" were intended to be tightly bound. Today, although in a very different context, compared to that of only ten or twenty years ago, the automotive sector with 872 companies, more than 90,000 employees and an estimated turnover  of about €18 billion (data by Turin's Chamber of Commerce related to 2012), has been confirmed as one of the most vital sectors of the district. But this is not the only one. In fact, Turin with a long and glorious tradition in culture and education – the Polytechnic, one of the most prestigious universities in Italy, was founded in 1859 – boasts a strong specialization in high tech. First of all in the aerospace sector, with five big companies (including Alenia and Selex Galilelo of the Finmeccanica Group) and more than 300 SMEs, with 12,000 employees and a €2,6 billion annual turnover. The focus is also on ICT, with almost 5,300 companies, representing more than 65% of the regional and 5% of the national trends. Concerning technology, is worth to mention the crucial position of mechatronics that, as announced by the Turin Chamber institution, can boast record numbers across Piedmont: 1,300 companies, 125,000 employees and €10 million sales a year. A further and significant confirmation of the centrality of technological innovation for the district can be gathered from the data related to investments in R&D in Piedmont, with more than €2.2 billion per year in the period 2011/2012, and those related to the GDP percentage spent on research. For both of them Piedmont stands out in Italy (1,8% regional compared with 1,3% national trend),  close to the European average (2%). If for the provincial economic system the new economy is an essential feature, nevertheless a relevant role is being played by "traditional" products. That is the case of the agri-food sector –  with over 64,000 companies, approximately 124,000 employees and an export value of €4.3 billion in 2012 – or the design sector, consisting of 850 subjects for a global turnover of  €13 billion (2012).

 

Agricultural Mechanization: the supremacy of components

In matter of "traditional sectors" within the mechanical field, the agricultural machinery market, in which Piedmont ranks fourth in Italy for the number of enterprises (over 200), just behind Emilia Romagna, Lombardy and Veneto, has become particularly prominent. After Cuneo, the district of Turin can boast a top grade specialization and has a high-ranking at a national level. Of note, within this segment is the leading position of components. Whether it is about blinkers or transmissions, bearings or hydraulic motors, pumps or alternators, the half of Turin's agromechanical enterprises designs and manufactures components, followed by those specialized in agroenergies (10%), animal husbandry (5%) and haymaking (3%). Turin's inclination for agricultural mechanization could be explained through the district's main manufacturing sectors: transport equipment and machinery. These two sectors produced in 2012 a flow of exports equal in value to 58.2% of the total provincial. These economic advantages have targeted the offer to shared applications and technologies that are compatible with different kinds of mechanical means and therefore with different production areas. Another factor that may have prompted companies to focus on components for the manufacturing of vehicles, equipment or agricultural tools, is the weight of industry and services with respect to the primary sector. This is evident above all in terms of  provincial value added, as the primary sector in Turin – with the prevailing of animal husbandry, corn and wheat crops – has a market share of just 0.6% (Atlas of Competitiveness Unioncamere, 2011). Furthermore, given as a parameter the provincial share of value added, agriculture shows a delay compared with more dynamic provinces such as Cuneo (value added 4.1%), Asti (3.1%) and Vercelli (2.7 %). All of them occupy the highest positions in Piedmont with much higher values than the regional (1.5%) and national average (2%). A confirmation to this effect seems to come from the Istat general census on agriculture, which shows a significant decrease (the most pronounced in the region) between 2000 and 2010 both for the Utilised Agricultural Area (-12.6%) and the Total Agricultural Area (-27.6%). A much less linear trend, however, for the indicator relating to the registration of tractors which, over the past six years, has alternated between substantial decreases and sudden recoveries. So it was for example in 2011 when, in a negative context for Italy, Turin saw the registrations reach the number of 764 units, thus improving the point of maximum value (in the period 2007-2013) reached in 2008 with 742 units. It was, however, a short-lived recovery, followed in 2012 and 2013 by an even more pronounced slowdown (around -30%) than that recorded between 2009 and 2010 (-12%). A real collapse that left turned off even 230 units, 164 in 2012 and 66 more in 2013, worsening the negative trend resulting from 2008 international crisis.