Everything about agriculture is getting bigger — except for the world in which it operates. That’s why we’re seeing so many manufacturers looking to grow their business by establishing operations overseas and vice versa.
And we’re not just talking about the big guys who have had major overseas operations for years — that are getting bigger by the day. But we’re seeing domestic specialty equipment manufacturers heading for the border and overseas shortlines doing everything they can to get established in the U.S.
To successfully compete at anything beyond a regional basis means you’ll need to become a world player — in some way, shape or form.
Even dealership groups are becoming increasingly multi-national. Titan Machinery just closed on the acquisition of two Romanian Case IH dealerships. Cervus Equipment has had an interest in John Deere dealerships in New Zealand, while RDO Equipment has had operations in Russia for several years.
Two of the reports in this issue of E-Watch zero in on the trend of equipment manufacturers moving into international markets to grow their businesses. (See, Kubota Secures Control of Kverneland on p. 02, and Farm Equipment Attracting Investment, Especially for International Expansion on p. 04.)
Pay particular attention to the words of Kubota’s chairman when he says the company can’t just view itself as a Japanese manufacturer. ““We must cease to accord Japan special status and start seeing it as [only] one of our principal markets …”
That’s a huge concession for a proud Japanese company to make. It’s also demonstrates that he recognizes that, for all the success they’ve had in the past, they must change the way they’ve done business for decades if they want to remain competitive.
Some dealers I’ve spoken with, who have doggedly kept their business as local as possible, are surprised to hear about and resist believing that world events are affecting how they do business. But how farmers in your county are doing is only part of the equation anymore.
Today, crop yields in Brazil and Argentina figure prominently in the pricing of U.S. commodity prices, which in turn impacts local ag machinery sales. A hot market overseas, as we saw with Russia and Eastern Europe just a few years ago, skews the availability of new farm equipment in local North American markets.
That’s not to say that every dealer needs to become a multi-regional conglomerate in order to succeed. No, it means they must keep their eye on the bigger picture so they can plan to succeed in their little part of the world.