The car and truck OEM's have been doing this for at least 25 years, the factory looks at the dealer as their customer. The dealer is buying the product, so the factory wants them to be successful, then they can buy more.
You farmers are the dealers customers, the factory is only slightly interested in what you want.
The profit center idea is from about 1974, GM went to the dealers, lots of which were failing in 1974, and told them to set up 5 centers:
New Car sales
Used Car sales
Finance and Insurance
Parts
Service
And they instructed the dealer on how to best maximize the profits in each one.
New and used cars sales used to keep the dealership afloat. But with the competition from other makes, they can't get the 10% profit margin they had back then.
So when the cars got computers, and only the dealer techs had the diagnostic equipment and training and information, they could really jump the labor rates to work on those cars.
Now a day parts and service generate more than half the profits in a dealership. So of course the factory is working to keep all the repair in house and squeeze the owner and aftermarket out.
Anybody that makes something is trying to monopolize parts and service; that's where the real money is made. They might get large dollar amounts when they sell a tractor, but the profit margin on parts and service can be 100% and or up to 10 times that. It's like selling dope...
A neighbor sells and services x-ray machines. About 10 years ago, GE and Phillips, biggest OEM's, cut him out of training, service literature, and most spare parts. So he had to rep for other OEM's that would make him the dealer.
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Today's Featured Article - History of the Nuffield Tractor - by Anthony West. The Nuffield tractor story started in early 1945. The British government still reeling from the effects of the war on the economy, approached the Nuffield organization to see if they would design and build an "ALL NEW" British built wheeled tractor, suitable for both British and world farming.
... [Read Article]
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