It’s always interesting to get the other views when one of the big farm equipment makers announce a significant move in how they’re changing the way they do business.
When AGCO announced on April 8 that it would start selling “certain tractors” through the Rural King store chain, we queried AGCO dealers to get their take on the move. We heard back from hopeful dealers who trust that increasing the exposure of the Massey Ferguson brand will produce opportunities for them somewhere down the road.
Of course, we also heard from frustrated dealers who believe that selling Massey Ferguson tractors through a chain store that offers nothing beyond delivering the product to the consumer, only commoditizes the brand, making it just another off-the-shelf product.
But we also received a note from a detached industry observer from overseas who provided a wider European view of AGCO’s announced plans to sell tractors through a box store. He’ll remain nameless, as we don’t have permission to identify him or his company.
He says the announcement was no great surprise “when you consider that Massey Ferguson and AGCO in general lack a strong dealer network in some major markets. Hence, some of the Richenhagen rhetoric of late aimed at CNH. From the outside, and even here in Europe, most of us saw this as an attempt to rattle CNH dealers and thus allow AGCO to perhaps capture some new blood.”
He goes on to say, “So with few other traditional choices available, they have taken a more radical approach and wrapped it up in the 'future model' guise, which it may well be, but it also masks their inability to gain the sort of coverage they otherwise needed from a quality distribution network.”
Our European writer generally agrees with the frustrated AGCO dealers who see the move as being contrary to what the company has been preaching to its dealers. And in the long term, it’s one that may build brand recognition, but not necessarily brand loyalty.
“This approach will inevitably de-personalize the current business model,” he says. “However, if it works, it may be cheaper for all concerned and at the least maintain current AGCO market share at a reduced cost basis. End user customers may well not like this move, but if they save money it will be crocodile tears they are shedding!”
He concludes his note by adding, “When you are as diverse as AGCO brands, then trying something outside of the norm is sure to create interest and a revolution of some kind.”
What that “revolution of some kind” ultimately turns out to be remains to seen. Stay tuned.