How long before biggest dealers pack up

[Two Tone]

I have no interest at all in wanting to buy any new, or even new to me tractors/loader/anything with an engine.
Or for that matter any machinery other than what is vital for this farm to continue to be able to be farmable.

Machinery purchase is supposed to be an investment in the business to make it more profitable.
It all stopped being so a few years back.

I’m sure I’m not the only one thinking this way.
Machinery manufacturers have this bent on needing to build the biggest, highest capacity bit of kit that hardly any of us need or can justify.

Many of the smaller non-franchised dealers have already gone. It’s even difficult to get an on-site tractor tyre puncture repair done now.

Dealer service charges are pricing themselves out of existence
It’ll be a lot of one-man-band-men-in-a-van doing the repairs before long.

The only people buying new kit seem to be the Contractors.
Christ knows what Finance Company debts they shoulder!

I see a machinery dealer crash on the horizon. Lots of them.

 

[L P]

I have no interest at all in wanting to buy any new, or even new to me tractors/loader/anything with an engine.
Or for that matter any machinery other than what is vital for this farm to continue to be able to be farmable.

Machinery purchase is supposed to be an investment in the business to make it more profitable.
It all stopped being so a few years back.

I’m sure I’m not the only one thinking this way.
Machinery manufacturers have this bent on needing to build the biggest, highest capacity bit of kit that hardly any of us need or can justify.

Many of the smaller non-franchised dealers have already gone. It’s even difficult to get an on-site tractor tyre puncture repair done now.

Dealer service charges are pricing themselves out of existence
It’ll be a lot of one-man-band-men-in-a-van doing the repairs before long.

The only people buying new kit seem to be the Contractors.
Christ knows what Finance Company debts they shoulder!

I see a machinery dealer crash on the horizon. Lots of them.

It's not the dealers fault

 

[Two Tone]

It's not the dealers fault

True, it’s the Manufactures fault.
Not only forcing the Dealers to do what they have to do to remain that brand’s dealer, but because the manufacturer makes most of its money from financing the new kit to the farmer.

It gets so ridiculous that you get JCB finance failing over themselves to finance us anything we need, for any brand!


Exactly the same has happened in the Motor trade. Even worse with their PCP’s.
Dealers get really pi55ed off if you don’t want the finance!

 

[Whitewalker]

A finance guy told me 10 years ago he had clients with as far a 15 agreements going, I also know of a 200 cow man put a 7 grand machine on finance. No wonder the finance guys all drive around in top spec kit . I know one friend took over a finance company he worked for , he has a very comfortable life.

 

[kiwi pom]

Pitiful, they are being pushed too hard by those above and it isn't justified. Deere are a prime example, want to go to 3 UK dealers, why? John Deere sells itself. If they were like Claas I'd get it as they own most of the franchises, but deere don't own that. I'm loyal to deere for my dealers and shall continue until they are gone and swallowed up by deere and their monopoly. I'll go Case at that point or even kubota. The dealer matters to me far more than the product. The cartel just don't get that.

You said it yourself, John Deere sells itself (well that and JD finance) so why would you want a bunch of competing dealers discounting prices to get a sale when one 'dealer' can get full whack?
They still need someone to do the fixing (and get shafted on warranty hours) as well as sort the trade ins out, so they team up with one or two.

While there are still one or two willing to do it, that's what will happen. If everyone swaps to McCormick or Kubota or dealers walk away that might change

 

[MF CI]

It's just business in the 21st century. Like the corner shop and the high street shops closing as the building of out town retail parks and supermarkets goes on. The Times they are a changing.

Back to agricultural dealers, when most were single outlet family firms doing a deal with the boss was easy, getting a tractor no so easy. Unlikely to have much in the way of stock possibly the chance of an ex demo or place an order and hope to see your new tractor in 3 or 4 months.
Along come the group dealer with multi branches, now they may not have in stock the exact model and spec you want, but within the group they may be able to source a tractor imeadiatly.

Or you commit to support your local friendly dealer and buy a new combine from them, unfortunately mid season it suffers a major stoppage. As much as your dealer would like to help he has nothing to lend you. I heard the year before last a combine went up in smoke, the same day the Claas dealer called him and said come down the yard and pick a combine to take (from at least 10 if not 20) to keep you going and we will sort it all out when your harvest is done. That's what big group dealers can do but smaller independents can't. Not saying it's right it's just business.

 

[redsloe]

Tractor still under warranty, so no choice

Fair do's in the first 12 months.
Extended warranties only provide the opportunity to get more service charges for the dealer.

 

[redsloe]

And to be honest you could have done the filters yourself because they are that easy and paid a bloke £50 to inspect the wear points of your vehicle

Indeed. Used to years ago.
Trouble is, there used to be 5 of us on this farm not many years ago, now there's me.......

 

[FonterraFarmer]

Judging by the fact that Chandlers have just invoiced me £850 for Labour on a 600 hour service, I expect they will be going for a while if people are willing to pay it!!
Will certainly be having a word with them when I get back off holiday

Have you got a matching BMW???
£850 for labour on a 600 hours service, did they have lunch at the nearest bordello???

 

[ollie989898]

A finance guy told me 10 years ago he had clients with as far a 15 agreements going, I also know of a 200 cow man put a 7 grand machine on finance. No wonder the finance guys all drive around in top spec kit . I know one friend took over a finance company he worked for , he has a very comfortable life.

Mind, depends on the deal they could offer on the day. Some finance deals are better than bank rates and if they mean the farmer gets to keep X extra pounds in his bank account or it suits his tax position, then it may well have been a no brainer.

Finance is a service the same as anything else. How much value you derive from it is up to the customer himself.

 

[L P]

You said it yourself, John Deere sells itself (well that and JD finance) so why would you want a bunch of competing dealers discounting prices to get a sale when one 'dealer' can get full whack?
They still need someone to do the fixing (and get shafted on warranty hours) as well as sort the trade ins out, so they team up with one or two.

While there are still one or two willing to do it, that's what will happen. If everyone swaps to McCormick or Kubota or dealers walk away that might change

If there's no incentive for a sale, there's no incentive for back up either, run a centralised business model based on remote sales and the greatest strength deere has in its back up will be gone, it'll be one call centre where you're put on hold and flip flopped to the right department, it's already happening with some dealers and it doesn't work. I flat refuse to go through Farols system and end up with some 12 year old that drives 40 miles with the wrong part if I can't get hold of the one good fitter the local depot have, I call Hunts instead so I can speak to someone who knows their arse from their elbow. That will all be gone, leaving independants as the only alternate option. Hopefully when the time comes some dealers will ditch deere franchises before deere bankrupt them and consolidate on independand SH sales and independant back up, the polar opposite of the monopoly desires.

 

[Bignor Farmer]

Looked up companies house figures on the big 3 southern JD dealers today, average 3.2% profit on outlay. Hunt forest stood out by a long way on being sustainable, which I'm surprised by as they would be my chosen dealer to benefit me. Obviously making it work for all, good job.

The profit margin is thin but it’s all relative to how they chose to run their business.
Every sales person, fitter and director in a new vehicle every few years, flashy new premises etc etc.
If you trimmed the fat a little then the profit margins would be much higher.

A lot of cost goes on image.

 

[L P]

The profit margin is thin but it’s all relative to how they chose to run their business.
Every sales person, fitter and director in a new vehicle every few years, flashy new premises etc etc.
If you trimmed the fat a little then the profit margins would be much higher.

A lot of cost goes on image.

Even factoring all that in it wouldn't make more than a percent difference on margin. Not on 140-160m turnover

 

[Bignor Farmer]

Even factoring all that in it wouldn't make more than a percent difference on margin. Not on 140-160m turnover

If they’ve got £150M turnover and a 3% profit margin then they have £145M of costs. There will be some serious fat in there.

 

[L P]

If they’ve got £150M turnover and a 3% profit margin then they have £145M of costs. There will be some serious fat in there.

Ktwo have just gone to the wall with 6.5% on last declared accounts... you sure?

 

[Bald Rick]

Nah, rubbish, 3 good 6150rs for price of one new equivalent would be a far safer bet, or 5 £30k tractors, 10 £15k tractors... safety in numbers. Biggest issue with modern tractors is redundancy isn't factored in, when they stop they stop. Even the 737 max has triple redundancy to make it work when everything is pear shaped and that aircraft is apparently a dog. A £150k tractor should have manual overrides to carry on with the job when some sensor goes wrong

Conversely, it's easier to chuck a broken down tractor in the shed and forget about it/parts rob if you have more than you need.
Mind you, you arable boys need something to do after October

 

[Will 1594]

Looked up companies house figures on the big 3 southern JD dealers today, average 3.2% profit on outlay. Hunt forest stood out by a long way on being sustainable, which I'm surprised by as they would be my chosen dealer to benefit me. Obviously making it work for all, good job.

they doing well then .
would you think 1.2% on towards 160 mill is fair . chap in yard other day said he been with boss of big multi franchise co said that’s what they had left after every thing paid
and as for deere selling them selves he also said a farming company had changed a pile of tractors for case and saved an amount that would buy a good house
when the difference is 10/15 then you take a breath , but some of figures talked 40 less then you have to look at it . and consider changing colour

 

[britishblue]

It is an amazingly small margin and I often wonder how much a good accountant can get the margin down.. Compared to something like Sage group who turnover 2146 million and mahe 458 million profit

 

[L P]

Conversely, it's easier to chuck a broken down tractor in the shed and forget about it/parts rob if you have more than you need.
Mind you, you arable boys need something to do after October

I must be too busy polishing my skis to play at fixing tractors all winter.

 

[MrNoo]

That’s a 600 hour service too. Not even a big one!!

A friend had them quote to replace a water pump in his Kubota horse paddock tractor, £1200!!! He bought a pump for £62 and I did it for him, about an hours work.
I would never buy a tractor from them