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New Holland pulling dealerships

K

Keith Molden

Well-known Member
I heard last evening that New Holland has pulled at least 2 of the bigger dealerships in my area. For them to keep selling they would have to build new buildings and sell a million dollars worth of inventory per year which in S.E. Ohio that's nearly impossible for them to do. Both have big nice dealerships with large workshops. They are in 2 different towns and each are the largest in their respective towns. Kinda looks like another company did a few years ago and now only have large dealerships with branches all over and get rid of the little guy
 
Hopefully they can figure something out ,its a shame to loose local businesses, A million a year for an equipment dealership doesnt seem like a big ask but if theres no large commercial ag in the close proximity and not a big residential/ construction clientele it could be.
 
There are two new ones here in mid Michigan that have opened up over the last couple of years. One is a branch location for a single location dealer that said they were sending parts and service trucks to that area every day anyway, the other one is another branch location for a multi location dealership. One is just south of a Deere dealership, the other is located near that Deere dealership and a CaseIH dealership. They must figure the business is there, for two of them to have opened up in the same general area.
 
Cadillac, GMC, Buick dealer said they had to improve there building service bay, Wasn't that big of a deal. Now when you drive in, a gismo in the floor will check your alignment.
They have never said I need an alignment.
They have never said I should have my tires balanced, 40k
I did rotate my tires. And I have never seen tires with 40k that were like the day they were new. No cupping, edges, middle of tire all look good. I even ran my hand over tire, everything was perfect.

All car dealer seem to be improving buildings.
 
I forgot to say, My CaseIH/Kubota dealer is adding a large building. They are a biggest dealer in Terre Haute. Been there the longest too, 1967. I'm thinking my dealer is suffering growing pains.
 
Not surprised with the high degree of overlap between Case IH and NH. They simply do not need all these locations. Setting hurdles in place is one way to thin the herd without having the dealers' lawyers come after the corporation. I am fully expecting some closures around this region given the number of small dairies that have gone out in the last 10 plus years.
 
From what I understand, a dealership has to pay a franchise fee on the different items they carry. Example hay and manure handling equipment one category, tractors under 100 hp another category and another fee. Tractors over 100 hp another category, and gay and forage yet a different category with its own fee. Same with tillage Equpment, lawn and garden as well as combines and industrial. Each category has its own fee, and manufacturers requirements on ship size and space as well as factory trained mechanics. This is a good part of the reason small dealerships close down, you just cant pay all the franchise fees, if you arent selling enough volume
 
Having been on the road selling to dealers, I always believed in the Colgate toothpaste principle, the more it's out there, the more it will sell. Dealers become unhappy because they have to compete but more products are sold in the final tally. This has another reason for happening, which if we would ever find out, probably would seem really stupid. There are very few smart CEO's, most seem to make decisions by spreading tea leaves.
 
Not uncommon.

I believe that all of the established brands are doing so, for better or for worse.

Dean
 
It is a fairly simple concept. You have 10 employees, but only enough work for 6. Are you going to make an effort to keep the best 6 employees, and cull the workforce? or just hope someone quits? Then maybe you will end up with the weakest workers?

What the mfr does not want to do is let the weak (complacent) dealer, in a bad location, and a out-of-date facility (but low overhead)....chase the good dealer, in a good location, and a new building away to a different brand or business. Keep the best, cull the rest, before nature takes its course.
 
The older dealer with the socalled outdated buildings will have the best workforce around, Know what they are doing. And also know the customer and his needs. Not the big new place.
 
If like some areas here in NY the combine business nor very high HP tractor business is there. I have known over the years of dealers who did not have a combine contract with their main equipment manufacturer because there was no sales potential for combines. These areas were small dairy country and with the state of affairs in the dairy industry a lot of these dealers have closed or are facing closing. There is one rumored possibility of an actual expansion with Deere in an area which could use a JD lawn and garden location that could also handle small tractors, materials handling and hay tools. Not that I want to see any farmer have to travel further to reach a dealer but it is in the cards for many here.
 
This is the reality for all the farm equipment companies whether we like it or not. This happened during the 1940's and early 1950's with a number of IH dealers switching to JD.
 
It might have been the case where you were but to say the old established dealer had the best employees a lot of times is a stretch. I've seen dealers be long lived because they had deep pockets themselves or their relatives did. One JD dealer was on the board of directors for the local bank, owned allied business such as a feed mill, and owned quite a bit of land. They could get by selling little and being mean as possible as they were the only game in town.
 
I've seen older dealers who had the best workforce in the past that didn't accept new technologies, not setting themselves up to be the best workforce of the future. Good management is always looking to the future more than the past or they will not be a viable dealership for long. Maybe not a popular perspective on this site but it is the reality of business success.
 
I suspect manufacturers are looking at the future of agriculture and they are updating their dealership networks to support that future. It is now common to order parts, have then delivered, and also buy new equipment without setting foot inside a dealership.
 
Thinking back to all the dealerships I knew as a kid during the 1970's 3/4's of them were considered hole in the wall type operations for even back then. Two of the closer IH dealers could maybe fit three tractors in their shop if two of them were under 100 HP and did not have cabs on them. Another was a little more spacious in terms of offices, sales, and parts but maybe could fit 3 60 HP row crops in their shop assuming the one in the middle did not have priority in terms of being out the door ASAP.
 
the fewer dealers there are and the farther apart they are the fewer tractors there will be of that brand. therefore all the small units will be the imports and the great big ones will be jd as they still have dealers. Here agco is a days drive to and from so it's mail order. If I were younger I would have some tough decisions to make. As it is , my old stuff will last as long as I need it to, then either collectors or scrappers
 
Maybe,maybe not. The nearest dealer to me is a new AGCO dealer that sprang up out of a former Home Depot about five years ago. They went out and poached all the best people from other dealers and parts stores, no matter what brand they worked for. The manager came from a Deere dealer, mechanics from Deere, AGCO, wherever they could get the best. Parts people the same way, NAPA store, other dealers, ones who had the best temperament and were most liked by customers. They'll go to the ends of the earth to get you going ASAP. No 'I don't know what you're gonna do. Who's next?'.
 
I understand what you are saying, but your version of best and worst is from the corporate perspective, not from the customer perspective.

For me as a customer, they are getting rid of the best people, and keeping the worst.

Otherwise, I understand what your point is.

Paul
 
We have a decent NH dealer here, newer building,good parts guy, couple good mechanics. However I'd guess if it wasn't for the growing number of tractor Amish around here that they would be on the cut list as they have a heck of a time selling to anyone else in this solid green area.
 


A friend who had a long time successful MF dealership built a big new building next to the highway just before the 1990 downturn. Business fell off and a small dealer opened a bunch of little two car garage satellites selling compacts and got the MF line away from my friend. My friend is doing well with Mahindra now, while the other guy is long gone. Another friend who used to bring his 4020 to tractor pulls now and then has been adding JD locations on and I haven't seen him at a pull in over five years now.
 
I scrolled past this topic , thinking that will never happen around here. But sure enough, went to my dealer today and the sign was gone. Our dealer was multi-line, and new Holland rep said drop everything else or we are pulling the dealership. Owner said goodbye... He explained to me that the warranty service was s**t from new Holland, and has been for about five years. The latest skid steers were becoming troublemakers, and the store had to eat much of the warranty work. On the flip side, he had kubota nearly as long as the Blue line, and he says kubota will fall all over the place trying to resolve an issue, and the machines almost never come back once in the customers hands. A double plus. New Holland is starting to get a bad reputation, sales are declining , so what sense would it make to deal exclusively a product that appears to be slipping? Against a well-known tractor with a hay equipment line? And superior service? Sad to see no more blue flag flying over that building after fifty years, but New Hollands demands would have them closing their doors in a couple years.
 
The 1970's was the last time there were enough farms around to support those little hole in the wall dealerships. In a given area you'd have dozen little farms with a dozen full lines of equipment. Now you have one BTO in their place.
 
It doesn't cost the manufacturer a dime to have a dealership - unless the dealer is destroying the manufacturer's name with poor service. It would seem most manufacturers are hurting themselves with poor products. When customers can't find a dealer to service these complicated machines they probably aren't going to buy one.
 
Deere and New Holland have been doing this for several years. They want large so called super dealers or nothing. They arent concerned that theyre losing the business from us little guys. We may buy a few hundred or thousand in parts per year, but the customer they cater to spends hundreds of thousands. It probably makes better business sense to focus on the big money. I learned quite a while ago to just order parts online. There are several websites with very helpful people if you have to call, such as Messicks. Just the way it is now.
 
(quoted from post at 03:50:54 07/27/21) Deere and New Holland have been doing this for several years. They want large so called super dealers or nothing. They arent concerned that theyre losing the business from us little guys. We may buy a few hundred or thousand in parts per year, but the customer they cater to spends hundreds of thousands. It probably makes better business sense to focus on the big money. I learned quite a while ago to just order parts online. There are several websites with very helpful people if you have to call, such as Messicks. Just the way it is now.
Click to expand...


MJMJ, I don't see it as "the big money" I see it as "all the money". If all of the dealers within 100 miles are under the same ownership you can't shop between dealers for anything big or small. The price is the price. Manufacturer and mega dealer wins; consumer loses.
 
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