Agri Innovations
AGCO Tractors to be Phased Out by the End of 2010
Tue, 08 Dec 2009 10:10:10 CST
In an exclusive interview with Agri Marketing magazine, AGCO's Brand Marketing Manager, North America (NA), Phil Jones, provided more details about the reduction of the company's brands of agricultural equipment.
As background, in 2006, the company had organized its NA dealers to carry one of the company's three "cornerstone" product lines, AGCO, Massey-Ferguson (M-F) or Challenger. In total, the company is currently using more than ten North American product brand names and selling dozens of products spread among the tractor, combine harvester, hay & forage, seeding & tillage, and application equipment categories.
"The AGCO branded dealers basically represent the familiar orange tractors and are descended from an Allis-Chalmers and White brand heritage," Jones reports. "Many of these dealers also carry the transverse-rotor Gleaner combine, as well as its other lines of equipment such as White Planter, Sunflower tillage & seeding, etc.
Going forward in NA, the company will be eliminating the orange AGCO Tractors brand and the AGCO name from those dealerships. "We are working closely with the AGCO dealers to help them determine their future with us," Jones says. "In many cases, they will transition to becoming M-F dealers and in some cases Challenger."
There are currently more than 200 AGCO Tractor dealers in NA.
Jones says the company will continue to build orange tractors through 2010 but end production by the following year. "We will continue to service the tractors and provide parts for years to come," he reports.
In addition, the company has begun "co-branding" some of its lines of equipment. The main example of this approach is the M-F/Hesston line of hay harvesting equipment.
So, in the NA market, the company will have two sets of dealers. Massey Ferguson (there are currently more than 550 dealers assigned the M-F contract in NA) which carries a traditional mix of farm equipment products. And Challenger which offers principally tractors from mid-size, row-crop models to the largest, highest-horsepower tracked and articulated tractors, as well as combines and application equipment sporting yellow paint.
"There are 38 Challenger dealers," Jones says. "That tractor line was acquired from Caterpillar in 2003 and most of the Challenger dealers are also Cat dealers. Cat's dealer philosophy has been to have a limited the number of dealers serving large protected territories. Often CAT dealer territories cover entire states or multiple states. Challenger dealers have multiple stores and service centers throughout their territory.
In the global market, the company will have four brands: M-F, Challenger plus Valtra and Fendt. Valtra and Fendt are marketed globally but Valtra is especially strong in the Nordic countries and South America while Fendt is the number one tractor brand in Western Europe in terms of dollar volume, he reports.
"It has been in our strategic plans to increase market share in North America," Jones explains. "To accomplish our goal, we believe it is important that we approach our customers with strong dealers representing strong full line brands.
"By focusing resources on fewer brands," Jones adds, "AGCO can improve the impact of its marketing and engineering, and also improve its global competitiveness. Also, as farms continue to consolidate, customers expect more and more from their dealer and their manufacturer. Our long term success will depend on our shared ability to create brands strong enough to win over a very demanding customer base in a highly competitive environment."
When asked why the M-F brand name was chosen, Jones explains that brand has a much larger footprint globally, while the AGCO Tractors name was being used only in NA.
"We certainly appreciate the tremendous loyalty our customers have for the AGCO brand," Jones concludes, "and we will be rolling out exciting new programs designed to acknowledge their many years of support and keep them in our family."
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