AGCO's not the only stupid one

I stopped in the closest (20 miles) JD dealer this morning for a couple disk parts.  Got to talking to the parts guy, who has a financial interest in the store.  Asked if they were still selling Hesston/MF stuff as the sign was down on the road.  Said they were but the new road construction had caused them to take it down.  He told me that the AGCO reps were telling them they were thinking of dropping them as they didn't sell many MF tractors, even tho they sell the heck out of Hesston hay equipment, almost as much as JD.  They also wanted COD on tractors, no floor plan or 60 - 90 day grace.  Looks like AGCO is trying to make the Corporate numbers look better.
What nearly floored me was when he said he thought they would close up within a year before the JD suits changed their minds and decided not to drop their dealership.  He said JD only wants one or two dealers per state but because of the economy they have backed off.  This as a million dollar plus per year dealership with at least two stores.  The smaller dealers are really griping about the heavy handedness of corporate headquarters.  Seems like Kubota is the only one expanding dealerships any more.  People will only drive so far to a dealer no matter how loyal they are to a color.   Kind of like GM and Chrysler, close a bunch of dealerships and wonder why sales have dropped off.

When a Deere rep was into my Diesel mechanics class back in 1991 or 92 they told us it was a long term goal to have 1 or 2 dealers in each state and that the farmers would be their own parts and service stores with training for the farmers hired mechanics. He also said in addition to advanced technology they were also trying to incorporate the need for special tools into the service of their tractors in order to keep the farmers hands and the shade tree mechanics from working on the tractors. This would boost the profits of both dealer and manufacturer.

  it has been that way for quite of my customersTODD  one tells me had to go 90mi.to get parts  they  do not have them when he gets there  has  to order and another trip

Dale-OH wrote: As a Versatile dealer I will not be very happy if they put another dealer within 60 mile of me.  There are some areas that will not support that many dealers.

Wow, after watching and reading the links Steff posted above, it looks like AGCO is using the same playbook as JD.  I can't help but see a great future for short lines like Versitile, McCormick and Kubota, to name a few.  Do these big companies really think we will be all that loyal when we have to drive a hundred miles for parts. There are some really upset former and currant JD dealers out there.  This is really getting interesting!

I think that they are talking about one or two owners of the dealerships in each state, not one or two locations.  The local Deere dealer I use in Utah is Greenline Eq. (owned by Arizona Machinery) has three locations spaced between 70 and a 90 miles apart along the I-15 corridor.  Now that my Cat dealer is out of AGCO it is about 80 miles one way to get Hesston parts.  Most of the time the parts I need are not in stock and will have to be ordered so I have them drop shipped to my home.  If they have to be shipped, why pay for the shipping and then have to drive another 80 miles to pick the parts up when they can be sitting on your doorstep in the same amount of time.

Edited by naylorbros - 29 Mar 2010 at 8:07am

I agree with the last two posts but I do think that companies that have close by dealers are going to pick up market share.  The bottom line is, well, the bottom line.  If the Big three and Cat think they can make more money with less dealers and locations, so be it.  If the smaller brands go the other way and pick up the crumbs they may be happy.  I'm wondering how far a person will go to buy a new machine, will it all be on the internet? Somewhere there still needs to be the personal contact.  How far will you go to buy a new car or pickup.  GM has dumped both Chevy dealers in my county, expecting people go drive to Denver or north 50 miles.  Chevy sales have dropped since the dealers started closing a lot more then Ford and Chrysler.  Who Knows what to think.

I am sure that as Versatile keeps growing that in the end they will become ruled by Corporate people who have lost almost all connections to the end user.