John Deere weeding out dealerships

[WVaHillbilly]

2nd to NONE...

Kyle,
That is the way I feel . I like to go to the John Deere dealerships just to see the equipment in the showroom,but I like to look at other brands as well. I can order a part one day and it will be at my front door the evening of the next day. I am not knocking the other brands but I think John Deere is one of the few if not the only one that has such a user friendly web page that allows you to order your parts etc on line and have them delivered to your home in such a quick efficent manner.

 

[gamble77]

NOT TO MENTION new 9000's, new 7000's, new 6000's, new combines, new revoluntionary cotton picker, new MoCo's...not sure why you don't think this is enough in one year?!?!?!

 

[plowrup]

What JD is doing is helping themselves-I recently went to a Dealer's Association meeting where a Dealer stood and said "John Deere has changed from a Customer driven organization to a Shareholder driven organization". I completely agree with that statement.

From a Customer's point of view a mega dealer may seem great-nice Facility, good Parts stock, generally good Tech's-the problem is, now it's harder to compare prices because you can have one Dealer CONTROL a large area, forcing prices up (Sale/Parts/Service). Are you willing to pay for the trade-off? (don't forget about Warranty repairs down the road)-

And Deere is learning that bigger doesn't always mean better-they recently have had a large Dealer ($80-100M) go under with no takers for such a large area (and Capital $$$$$$). There are other large Dealers on the verge, too.
Management?

Do you really want to deal with a Corporate atmosphere or a home town type? I believe this is opening the Door for the other Brands to gain a foothold in the Market.

There are less people who understand the Deere/Case/NH story and are buying competitve brands-Deere's strategy of keeping lower Inventory at Dealership's is hurting Dealers (although they will tell you there Market Share is good-fact is, it's down from just 5 Years ago, and then point out that their Receivables are down). Okay, I can go on and on, but CNH/Kubota are not pursuing this avenue-wonder why?

 

[Robert_in_NY]

What JD is doing is helping themselves-I recently went to a Dealer's Association meeting where a Dealer stood and said "John Deere has changed from a Customer driven organization to a Shareholder driven organization". I completely agree with that statement.

From a Customer's point of view a mega dealer may seem great-nice Facility, good Parts stock, generally good Tech's-the problem is, now it's harder to compare prices because you can have one Dealer CONTROL a large area, forcing prices up (Sale/Parts/Service). Are you willing to pay for the trade-off? (don't forget about Warranty repairs down the road)-

And Deere is learning that bigger doesn't always mean better-they recently have had a large Dealer ($80-100M) go under with no takers for such a large area (and Capital $$$$$$). There are other large Dealers on the verge, too.
Management?

Do you really want to deal with a Corporate atmosphere or a home town type? I believe this is opening the Door for the other Brands to gain a foothold in the Market.

There are less people who understand the Deere/Case/NH story and are buying competitve brands-Deere's strategy of keeping lower Inventory at Dealership's is hurting Dealers (although they will tell you there Market Share is good-fact is, it's down from just 5 Years ago, and then point out that their Receivables are down). Okay, I can go on and on, but CNH/Kubota are not pursuing this avenue-wonder why?

Deere doesn't want their dealers competing with each other. They want them competing with CNH and Agco. The last thing they want is for a buyer to go from Deere shop to Deere shop and play the price game. They do want to beat CNH and Agco though and that is what their concern is.

If you don't like the price of the Deere you have options. Look at other brands and let the Deere dealer compete with the other brands. The dealers talk to the reps, the reps talk to Corp. If the dealers complain that their customers are buying more of the other brands because of such and such it will be up to Deere corp to adjust to the market.

A small town dealer will go under just as fast as a "mega" dealer with poor management. It appears my local Mahindra dealer finally went under even though he sold a lot of tractors. Yet the multi stores are doing well as is the one independent Case-IH dealer. The MF dealer is an independent and has a poor attitude which hurts his business.

 

[plowrup]

Robert,

I appreciate your opinion. I've been a General Manager in this business over 30 Years (with Case I-H and Deere in 3 States) and my biggest competitor has always been my neighboring in-line (same Brand) Dealer-Deere could care less about competition-think about it-they get the sale (and the profit) no matter who sells it, however it WAS true that Deere did care once upon a time about Dealers.

You are absolutely correct in that any Dealer can go under w/bad Management-Deere will pressure you w/Market Share-that's how they keep the pressure on (again, it's their Shareholders they are concerned about). Margins (and Expense containment) keep Dealers strong-I attended a Deere meeting about 8 Years ago or so where Deere was very concerned about Cat at the time-they told us that we had to offer the same level of Facilities and Service that Cat did-never mind the fact that Cat Dealers regularly enjoy Gross Margins above 30% (on Sales)-not a reality for Deere Dealers.

Another Poster here was also correct in that it does cost money to offer the kind of Facilities and Service that Deere is looking for in what they call the Dealer of Tomorrow-John Deere (and other OEM's) have a problem attracting Investors to start (or buy) Dealerships given the ROI (Return On Investment) in this business. How do you attract Investors? You increase Dealer profits. The best way to do that? Give a large area to a group of stores owned by one entity, let them control that area and increase prices. Fact.

You are also correct that people will go to other Brands-hence my comment on Deere's overall loss of Market Share (particularly the 50-100 h.p. class). Competition for Sales is intense especially since there are so few overall Sales (compared to, say, Auto Sales), and the increase in Asian import Tractors that are now on the Market.

 

[Mayor]

I can tell you that in my area one large dealer sold to a two store deere dealer (3 stores now). The other deere dealer is very small (1 store) and is 15 miles away. Looks like they are going to close. Now who do you buy your tractor from. The large dealer that has zero customer service and the service dept is the worst or the dealer that knows your name and is very helpfull with parts and service that will not be around next year.

This was driving me nuts when I got my 2305. Now I have the tractor I want but the worst service from a large chain deere dealer. I always think it will get better but it never does. Love my deere and hate my dealer. That sounds like the norm on most of the forums. Great job deere keep up the good work!!!

Save your self and spend the money on the tec cd and do the work your self!!!

 

[JiminGa]

I bought my first deere in 03, a LT150, within 6 months my dealer and the other local 1 owner dealer closed, all we have left close by is a chain. I traded up to the 2305 with them and so far so good. everyone knows my name and they are very helpful...guess I got lucky.

 

[JiminGa]

BTW Gamble, I am another happy GreenSouth customer!

 

[gamble77]

Great! Deere isn't out there trying to make the large dealership groups a "big box" environment. What they are doing is allowing the strong dealers with good business practices to grow so those good habits are passed down to the other locations. Obviously this doesn't work all the time but that is what they are going for.