Dec 8 (Reuters) – Farming and construction manufacturer CNH Industrial’s (CNHI.MI) decision to permanently halt construction sales in China was due to declining market share and competition from local companies, the company’s CEO said on Thursday.

Mounting debt from Chinese property developers has been the catalyst for falling housing prices in the region and an overall real estate downturn that translated to a slump in construction sales for CNH Industrial and its rival Caterpillar (CAT.N).

“We couldn’t see a path of future growth in a market where our brand presence wasn’t strong,” Chief Executive Officer Scott Wine told Reuters in an interview.

The company said on Dec. 1 it would stop selling its construction equipment in China effective Dec. 31.

Last month, automaker Stellantis(STLA.MI) announced its joint venture that made Jeeps in China would file for bankruptcy, a potential sign of trouble for other global automakers facing competition from domestic players.

While Wine said he is broadly pessimistic about the global economy, he said agriculture remained a bright spot. The company will continue to sell agriculture equipment in China.

CNH Industrial, like other agriculture equipment makers, is expanding offerings of electric-powered tractors and precision agriculture products that the company displayed at its first technology day in Phoenix, Arizona.

Agriculture sales accounted for 80% of third-quarter revenue and the machinery maker is forecasting $900 million in net sales of precision technology for fiscal year 2022.

The company unveiled the industry’s first autonomous dry fertilizer spreader in September and said it plans to roll out the machine in larger volumes over the next couple of years.

Reporting by Bianca Flowers in Chicago; Editing by Lisa Shumaker

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