Senior AGCO managers joined suppliers and other guests for the fanfare opening of a more efficient, higher capacity Fendt tractor factory in southern Germany.

Confidently described as the world’s most modern tractor assembly plant, it has new production and assembly halls housing a 1 km-long production line, more efficient manufacturing processes, upgraded IT systems and new production technology. Together with improvements to the cab plant nearby, where cabs are built in concert with the tractor production schedule to minimize inventory, the project cost AGCO $300 million.

The Fendt Ahead2 project was put on hold when the world financial crisis of 2007-08 caught up with the agricultural sector and was only resumed early last year — but with a more ambitious program than originally planned.

Hubertus Köhne, vice president of manufacturing at Fendt, says the final assembly facility was erected on a greenfield site at the expanded Marktoberdorf premises in just 13 months.

Apart from improving working conditions and efficiency — most components and sub-assemblies are now delivered straight to the main assembly line rather to an intermediate stocking area — the new plant significantly raises the ceiling on Fendt production capacity.

Peter-Josef Paffen, vice president brand director at Fendt, notes that if sales hit his 2012 prediction of 17,500 units, output will have increased by more than 60% in the past 10 years. The plan for 2013 is a more modest 3% growth, which would take sales to the 18,000 mark, moving toward 20,000 units in the following years.

Paffen is confident that Fendt can double even that impressive figure within the next dozen years; bear in mind this a tractor line that boasts advanced technology, durability and high-end specifications — and sells at a premium.

Fendt managers clearly have no intention of easing up on technical progress. R&D investment at Marktoberdorf has tripled over the past 10 years, climbing to the equivalent of $62 million last year, and it will top $66 million this year, approximately 4% of revenues out of a total investment budget of $123 million.

In France, AGCO is spending $20 million on a new cab assembly facility for the Beauvais plant that produces Massey Ferguson and equivalent Challenger wheeled tractors. It’s the largest industrial investment at the plant since the mid-1980s, points out managing director Richard Markwell.

Moving cab production from the main site, where AGCO has a joint venture with Claas manufacturing transmissions alongside the assembly plant for Massey Ferguson 5400 to 8600 Series tractors and their Challenger counterparts, will allow further refinement of a lean manufacturing program by improving logistics flows.

Assembly of MF8600 Dyna-VT and Challenger MT600C tractors for the U.S. market was moved to AGCO’s Jackson, Minn., plant earlier this year.