There's nothing all that new about business alliances, where two concerns seize the opportunity to capitalize on each other's respective strengths to increase sales and capture market share. But the coalition of Kubota Tractor and Land Pride implements brings a new dimension to the partnership game in the farm equipment world and has many shortline manufacturers and their dealers wondering where this era of "pick your partner" will ultimately lead.

Land Pride, a division of Great Plains Manufacturing of Salina, Kan., manufactures landscape and turf-related tractor mounted implements. Kubota Tractor Corp., Torrance, Calif., is the U.S. marketer of Kubota-branded tractors up to 103 PTO horsepower.

Early last September, the two companies announced a "strategic alliance" in which participating Kubota dealerships in the U.S. would offer performance-matched Land Pride implements like rotary cutters, grooming mowers, rotary tillers, rear blades and pretty much any 3-point tool that Land Pride offers. The companies said they were looking to achieve market synergies that both needed to further penetrate the rapidly growing rural lifestyle and utility-class construction markets.

What got the industry's attention was that this partnership went beyond the typical manufacturing alliances and rebranding that have been prevalent in many industries for decades, where one manufacturer produces complementary equipment for another and is marketed by the buying partner as "its own."

For example, the Frontier brand of farm implements are manufactured by a variety of suppliers but sold exclusively through independent John Deere-franchised dealers. But it's no secret that Frontier Equipment is a Deere brand.

Concerns & Speculation

It didn't take long following the Kubota-Land Pride announcement for the rumor mill to begin turning with speculation and concern about the impact of the agreement on both dealers and other shortline manufacturers.

One rumor that made the rounds early on was that Case IH and New Holland were in discussions with rotary cutter manufacturers looking to set up a similar arrangement to what Land Pride and Kubota were doing.

One Farm Equipment source, who asked to remain anonymous, speculated that "If CNH inks a deal with a rotary cutter manufacturer, it won't be long before it spread to other products. This causes concerns that if you're not supplying one of the major-line manufacturers, you could be left in the cold."

The bigger concern for dealers was that Kubota, which has historically offered 0% financing to tractor buyers up to 125% of the base tractor's purchase price, would offer 0% financing on Land Pride products, leaving little room for other manufacturers' equipment.

A shortline manufacturer who asked not be quoted says that he doesn't believe the Kubota-Land Pride deal will go too far.

"Where is the money going to come from in order to pay the tractor company a margin and also pay for the retail financing?" he asks. "The attachment manufacturer has to raise the prices to pay for all of this. So, the question is whether the alliance with the tractor company is worth pricing yourself out of the market. How receptive is the dealer knowing the attachment manufacturer is paying a tractor company and the dealer is in essence pay for that activity?"

Furthermore, the Farm Equipment source says, "It's worse for the non-Kubota dealer whose price just shot up to paying for the financing deal."

Some dealers also expressed concern that the manufacturer, which has historically been hands-off with regard to line selection, was following the lead of its major-line peers when it comes to what brands receive resources at the dealer level. Some retailers feared that independence would disappear in the form of financing incentives.