Blog: Niels van der Boom

Dealer landscape continues to change

29 August 2017 - Niels van der Boom

The Dutch dealer landscape is far from finished changing. It will of course never be, but I do foresee some shifts left and right in the coming years. Partly driven by manufacturers, partly by the companies themselves. What does this mean for the farmer?

Full-liner strategy, mechanization companies that focus on 1 brand or are put aside after decades. Topics that concern me and the mechanization sector. It is certainly not the first column which I dedicate to this. There is a good chance that we will have plenty to report in this area in the remaining 4 months of 2017 and beyond.

Who will be taken over by whom remains a mystery

difference of opinion
Last week I was a guest at Kverneland for 2 days. Besides a preview of the novelties, which will be shown at the Agritechnica later this year, there was of course plenty of time to socialize with each other. What struck me, when we sat at one table with a group of agricultural press and the people from Kverneland, was the difference in opinion about takeovers within the mechanization sector. Some see it as a threat, others not at all.

Takeovers a mystery
It is of course interesting to hear what the 'insiders' at Kverneland hear about their mechanization colleagues. For example, Mazotti, the Italian manufacturer of sprayers, was recently taken over by John Deere. Kverneland again uses the undercarriage for their self-propelled vehicle. The takeover news also came like a bolt from the blue for the men from Nieuw-Vennep, I was assured. Who will be taken over by whom and when is often a great mystery to both the sector and the journalists, although there are always suspicions. Not every brand is equally strong financially or technically.

One color or all colors?
The rumor mill is always running. Usually these are modest acquisitions. For example, Bogballe, who changed hands on August 15, 2017. The eyes are mainly focused on large companies that have not yet found a connection with a tractor manufacturer. Take a Maschio-Gaspardo, Pöttinger or Lemken. This consolidation in the market is clearly noticeable. The full-liner strategy.

CNH, Agco and John Deere, among others, are busy with that. SDF steered in the other direction and divested the forage extraction branch. Kverneland, owned by Kubota, emphasized during their event that they are universal machine specialists. There was exactly 1 Kubota tractor present at the presentation. This underlines that every color tractor is welcome as a power source for their implements. The machine is leading in terms of technology, it says.

Technological backlog
The strategy that Kverneland has in mind fits perfectly with agricultural entrepreneurs in the Benelux. It is not for nothing that the brand invented Isobus, in the Netherlands. Fellow manufacturers and tractor builders are not always so careful. Over the past 20 years, the system has taken on an aftertaste.

Protocols that do not 'talk' to each other and machines that cannot be controlled properly. In 2017, when purchasing a new machine, that is much better. When manufacturers aim for one color for everything, that vision is once again jeopardized. A New Holland big square baler can always communicate with its tractor rather than with brand X, just to name a few. Difficult when you are independent and this technique is withheld from you. That's how you start with a backlog.

Out of necessity, 1 brand is chosen

shear policy
Looking at the character of the entrepreneurs in Western Europe, and certainly in the Netherlands, a 1 brand strategy does not fit into the market image. This may affect compatibility. You can already see in practice that farmers are forced to choose 1 brand to be sure of reliability. Otherwise there will be a shear policy among companies and a lack of service.

Expertise in jeopardy
Which brings me back to the mechanization companies. Manufacturers that are taken over eventually have their effect on the dealer landscape. This is sometimes dealt with creatively, for example by setting up separate private limited companies, but they are forced to show color in a left or right direction. The model adopted by the car industry is difficult to migrate to agriculture. Decades of ties are easily broken by management. As a result, relationships and expertise are lost.

Ultimately, it is the end user who foots the bill. Sooner or later his machine needs service and a name on the facade does not say everything about the professional knowledge of the company. With a continuously changing brand strategy, this is jeopardized. Hopefully, manufacturers also keep the dealer and end user in mind when taking over. This is often thought of very easily.

Niels van der Boom

Niels van der Boom is a senior market specialist for arable crops at DCA Market Intelligence. He mainly makes analyses and market updates about the potato market. In columns he shares his sharp view on the arable sector and technology.

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