What’s in store for the machinery sector in 2020? Jim Garrod – JP Trett Agricultural Machinery Recruitment Expert
Happy New Year! Never one for retrospectives, I’ve always preferred looking ahead and in recent years having an educated guess at how the industry will behave in the forthcoming 12 months.
The hot topic of the moment continues to be franchise and distribution arrangements, currently at their most active for several years, either dealer-led or manufacturer-driven. On the dealer-led front, it’s interesting to see that some businesses are refocusing on a tractor-free future, with Barlows in Cheshire ceding the Case IH franchise and Bigwoods in Somerset relinquishing Valtra. There is no doubt that for a small family business (the cornerstone of ag engineering and a business profile much-needed by all farming customers in a given locality) the requirements of the main brand are exacting (they have to be, in order for professional representation to be upheld) and whilst these decisions will not have come easily, they may well give these businesses a big sigh of relief. Equally, for a large multi-branch dealership the pressures are probably no less, just with an extra zero or two on the bottom line to give FDs a few sleepless nights.
On new franchise news, Czech brand Bednar has partnered with Ernest Doe across its entire trading area in the South-East, in many ways filling a Great Plains-sized hole in the Ernest Doe portfolio following the demise of the Sleaford-based manufacturer a few years back. SIP too seems to be making some inroads with a few notable dealer appointments. With all recent entrants to the UK market, distribution and dealer partnerships are the absolute key to success; regardless of Brexit the market will reach saturation point (maybe it has already?), but with the aforementioned Great Plains, Lely, Kongskilde and one or two other familiar names absorbed into a global longliner portfolio of late, there are gaps to be exploited. Elbow room for implement manufacturers is certainly plausible, with the obvious caveats of product support, dealer training, ease of spare parts supply and healthy brand marketing all playing their part, but for tractors and telehandlers to be taken seriously, the stakes are much higher and it remains to be seen whether, in a gradually declining tractor market, brands from Turkey, India and China will make any real impact. The 2018 AEA figures will be out in the public domain soon; the brand breakdown and market shares will prove interesting reading as always.
John Deere’s strategy has been clear since Agritechnica, and it is expected that their UK dealers will reduce to around half their current number (same or similar numbers of outlets, just fewer, bigger dealership groups). I am unconvinced that AGCO or CNH will follow suit, given their multi-brand, multi-product portfolios which inevitably make the picture more complex. Both companies have existing super-dealer groups (whose sales activities would incidentally exceed Deere’s new turnover number) on one hand but with many other smaller (and high performing) dealerships at the other end of the spectrum. Not forgetting Claas, whose dealership groups look to have settled into a stable and future-proofed network, with notable implement brand partnerships going forwards including Horsch, Lemken and Stewart Trailers. Kubota’s intentions remain to be seen; they await high horsepower tractors for sure but have some smaller proactive dealers punching above their weight, often with Kverneland or Vicon franchises in support. Manufacturer pressure on dealers to support their full and no doubt growing portfolios will stimulate further changes this year……
With Lamma doing its now calendar fixture job of catching everyone by surprise straight after New Year (spare a thought for those whose whole weekend was spent on stand assembly, machine polishing and dining on Deliveroo / Just Eat / Uber Eats) there will, unsurprisingly, be plenty of talk and speculation at the NEC about the next seismic move or small tremor.
As always, it generally boils down to getting land ready to put seed in, planting and looking after the seed and ensuing crop, and then getting the crop off the field in a timely and efficient a manner as possible. For the immediate future, this will be relatively robot and autonomous vehicle-free, but these will come, tractors-for-horses style as it did from the 1930s onwards.