Kubota forcing dealers out?

[Ford850]

We had several independent JD dealers within an hour of me. They were gradually bought out by a larger one but with about 5 or 7 total locations, they were consistent and provided pretty good pricing and service. Now under that large ownership mentioned above, they have a monopoly with 84 stores. Look up a part and get pricing online, go to the store to buy, only to find they charge above suggested retail. If you complain they will match the retail price listed online. They are more proud of their green paint than ever, and they know you'll have to drive for a day to get outside their monopoly of stores.

 

[Garandman]

I had a different kind of dealership (engineering softwRe and 3D printers) and sold out to a bigger company. They had 150 dealers in the US 10 years ago, and now they have about 30. Most car brands, and BMW, Ducati, HD and Triumph motorcycles, similar trend.

Two reasons:

1. It痴 easier for the company to deal with a small number of large dealers, who often have a lot more sales and marketing resources.

2. The amount of capital involved to have inventory and parts and staff is beyond what a small dealer can capitalize. I had every dime in my business. The company who bought me wrote me a check.

 

[radios1]

there are ALL kinds of businesses that have closed in My area, including whole shopping centers. the cost of rent is way too high, electric is too high, property tax is too high, and they just can't afford to lose money anymore due to not enough sales..

 

[ruffdog]

there are ALL kinds of businesses that have closed in My area, including whole shopping centers. the cost of rent is way too high, electric is too high, property tax is too high, and they just can't afford to lose money anymore due to not enough sales..

Yep...seeing it all over. We are in different times now.

 

[EddieWalker]

When I first moved to Tyler back in 2002, my local Kubota dealer sold New Holland and Massey Ferguson. They also sold a few different brands of implements, but I forget what they where. When I went to look at tractors, they had dozens of Kubota tractors in the 35hp range, a couple New Hollands and a couple MF to look at. The other brands where mostly big 100hp sized machines. They salesman bad mouthed the other brands and said Kubota was better, but couldn't explain to me why or what made Kubota better. A few years later they no longer had any other brands there and it's been 100% Kubota tractors since then.

 

[TractorGuy]

When I first moved to Tyler back in 2002, my local Kubota dealer sold New Holland and Massey Ferguson. They also sold a few different brands of implements, but I forget what they where. When I went to look at tractors, they had dozens of Kubota tractors in the 35hp range, a couple New Hollands and a couple MF to look at. The other brands where mostly big 100hp sized machines. They salesman bad mouthed the other brands and said Kubota was better, but couldn't explain to me why or what made Kubota better. A few years later they no longer had any other brands there and it's been 100% Kubota tractors since then.

I went in a Kubota/New Holland dealer a while back and had a similar experience. I expressed an interest in a mid size HST cab tractor. They seemed to have an equal number of both makes but steered me toward the Kubota and gave examples for why I shouldn't consider the New Holland. I don't recall the examples given. This is probably why some manufacturers require their line only in the franchise agreement.

 

[JWR]

It seems that it is getting to more routine for manufacturers to require certain standard requirements for dealers. ...

In addition to making their product more prominent, a secondary effect is that it pushes out the small independent dealers. Usually, requiring standard sales area formats will end up with major cost for the dealers, eliminating the ability the smaller independent dealers to comply. Much, much larger inventory of parts is also practically required, which of course is yet another cost factor. ...

Sadly, this change kills the homey-like atmosphere of the small local dealers. No more having a friendly, sit down and have a cup of coffee type of atmosphere. ...For me however, buying a tractor or an implement takes a LOT more consideration than something like shoving a coin in a vending machine like buying a soft drink.

Their 'new' selling format make be great for them. But it's sure not for me.

As everyone posted, that is the trend these days. I would offer the thought that rare few, if any, of us hear the unbiased real total story in these various anecdotes. No question parts of the stories are true. We all see the external effects from our own viewpoints. But those stories of "forcing" this that or the other thing are usually heard from disgruntled small dealers, opinionated employees who are not in control of anything, etc. Any comments I would have are strictly "outside looking in." I feel I "know" that MF dealers in WV had franchise renewals denied because they could not meet MF/AGCO business demands. New potential replacement dealers faced the same obstacle and were denied entry. Same thing in PA where Deere "chain" dealers went around sucking up smaller dealers. Same thing in VA where large dealers seem to have overflowing inventory on site and the smaller guys cannot get inventory to sell or demo. I just caution that rare few of us ever know the real, total picture between the dealers and Deere/AGCO/MF/Kubota/New Holland etc. corporate giants of this business. We have rumors, tidbits and biased stories, mostly. But collectively we hopefully (like this thread) piece together a higher credibility mutual opinion.

Specifically with Kubota: I have personal experience with two who shall go unnamed -- one is king of a whole state with multiple dealerships, a sales staff who knows very little about their own product lines in spite of being there for years, and has more than once been a purveyor of false information. The other is a very old family business in place for many decades, very knowledgeable of the product lines, and conservatively slowly expanding. And very reliable and honest no matter what discussion you are having with them. In my opinion the MAIN difference between these two is the "head of the place" and how they are managed, NOT forcing or pressure from corporate Kubota.

 

[radios1]

I went in a Kubota/New Holland dealer a while back and had a similar experience. I expressed an interest in a mid size HST cab tractor. They seemed to have an equal number of both makes but steered me toward the Kubota and gave examples for why I shouldn't consider the New Holland. I don't recall the examples given. This is probably why some manufacturers require their line only in the franchise agreement.

which is ABSURD!, because if the Company cannot make enough sales of that 1 brand, they have to declare bankruptcy, what good is that?. it's much better to let a dealer stay in business by selling what they need to sell!!..

 

[MHarryE]

Haven’t read a real official Kubota stance on this thread yet. I live in a very rural area. The dealer I work with has full line Kubota and New Holland. They have opted not to handle parts of the Kubota line where there is a clear conflict with New Holland products for which they have built up a following. I’m talking about things like balers. They are selective in which of the many Land Pride and Great Plains products by Kubota they sell. They seem to be able to coexist. In the larger city 50 miles away (larger to us that is) there is a Kubota dealer that is strictly CUT or smaller. Nothing in the ag lineup. We have the same thing in JD dealers. I need to drive 100 miles to our nearest JD ag dealer but much closer I have JD small equipment dealers who can sell nothing larger than a CUT. They also service the big box stores controlling everything John Deere for sale at Lowe’s and Home Depot.

The Kubota ag dealer (Combined with New Holland like Messicks) sees the small product getting them through times like these where prices for beef and dairy are so low - this is a beef and dairy area.

John Deere dealers were getting to be so cutthroat that none could survive. To make the sale they were selling at a loss and trying to make it up in volume plus the rare customers who didn’t negotiate as hard. Transaction prices were down with quantity sales up. Dealers bankrupt leaving customers stranded. So they took the step of forcing sell outs to force dealers into being profitable.

 

[JOHNTHOMAS]

Why does a salesperson "steer" a customer to one machine/brand over another one? Guess you've never been a salesperson. Salespersons usually get paid on full or partial commission/bonuses/vacations/awards and cash and their primary interest is in their income stream so why a salesperson "steers" customers one way or the other isn't hard to understand. Their commission may be tied to a specific amount for each machine/brand/product.
I have a dealer friend that has Kubota and had another old American brand for which he maintained a large parts supply on hand. The American brand was higher priced and In the major sales position of sub and compact tractors Kubota was the better priced and better machine but he still sold both brands. Another person opened a dealership within 8 miles and was selling the other Japanese brands and also got the rights to sale the red American brand! So, the red American machines left his lot and he never restocked them and when his red American parts were sold they were not restocked and he's now a Kubota only new tractors seller. He does buy and take trade ins of other brands with him being the owner and payer with his money for the used machines and sells other brand used machines but not new ones other than Kubota. Maybe this will help understand why others dealers you've seen have given up some of the other brands they used to sell.