Will all the brands survive ?

[DavesTractor]

It just depends on how bad things get. Our 1st qtr 2008 is slightly up over 1st qtr 2007, but I really don't expect that year end 2008 will be better than year end 2007. This is for our own dealership, I'm not speaking for Mahindra, I don't have access to that info.

We are seeing more buyers with cash. People that have saved money over the years. They often take advantage of the 0% financing, but could write a check for the entire purchase. We are seeing way less of the impulsive buyer. I miss that impulsive buyer.... .

 

[DavesTractor]

I agree. If you're making money in these times, there's going to be some great deals out there. Lots of property is coming on the market and it's going for prices well below what it would have sold for 2 years ago.

Back in 1973 and 1974 my dad had an RV Sales business, then the bottom dropped out due to the oil crisis. He waited for it to get near bottom and then started buying all the motorhomes and trailers he could at 25 cents on a dollar. He held them for a year or so, and doubled or tripled his money. It was a gamble and it required some working capital, but what a deal!

 

[MessickFarmEqu]

Not sure if this thread was related to this... but FarmTrac just went belly up. I found it interesting that no one pointed this out yet.

This market has seen 7-8 years of constant growth, even with that we've seen companies like Brandson faulter. If things start to slow futher there is no question that your going to see companies who are not moving volumes of equipment closing up shop. Many of the small companies only move a few thousand units a year. Its got to be very difficult to cover the overhead operations in this country with minimal sales. I would not expect to see complete forclosures, but its more likly to see them stop doing business in the US and push in other emerging markets. Some tractor companies are publicly traded. Someone recently looked at the financials of Daedong (Kioti) and found some very real reasons for concern. I am sure you could do the same with some others as well, it would be an interesting read. Beyond someone doing that work naming names would only be speculation.

 

[Soundguy]

FarmTrac just went belly up. I found it interesting that no one pointed this out yet. .

Hey.. now why didn't I think of that 1 page back! ( post # 26 )

soundguy

 

[DavesTractor]

This market has seen 7-8 years of constant growth, even with that we've seen companies like Brandson faulter.

Neil, I've seen you post about Brandson (sic) a couple of times and I don't get it. I'm also a Branson dealer and the company seems healthy. Am I missing something? I know Mark and Russ sold to Kukje (Branson Korea) so it is no longer locally owner, but that actually make the distribution stronger, not weaker. Let me know what you know, thanks.

 

[MessickFarmEqu]

Neil, I've seen you post about Brandson (sic) a couple of times and I don't get it. I'm also a Branson dealer and the company seems healthy. Am I missing something? I know Mark and Russ sold to Kukje (Branson Korea) so it is no longer locally owner, but that actually make the distribution stronger, not weaker. Let me know what you know, thanks.

My point was that these are not stable companies... thats all. Your absolutly right that the change probably makes the distribution stronger.

 

[NEFirewood]

Mahindra sells a lot of tractors to third world countries and that's not where the money is located. I'd imagine most of their volume is from cheap, no-frills tractors that don't bring a lot of profit. Mahindra worldwide will probably do OK, but it's U.S. division will take a big hit with the upcoming hard economic times due to the fact that they only sell homeowner machines.

When I was in South East asia a few years ago, little tiny tractors were all over the place. I mean, I would drive by a farm and there would be fleets of these tiny tractors working in boggy fields. Not a John Deere or New Holland nameplate in sight anywhere. But all the Japanese brands, Mahindra and others all over. Personally, having been there in person, it's definitely not the third world anymore. Sure there's depressed areas, run down and dirty, just like there are in the US.

But for them it's way cheaper for farmers there to buy a cheap little tractor and use manual labor. Besides, 1/2 of the earths population is in Asia, the US is just a teeny fraction of the marketplace. I've been to shopping malls in Asia that dwarf anything in the US. That much capitalism is pretty hard to call 3rd world.

 

[mboulais]

Mahindra might sell a lot of tractors, but they're not a player in the agricultural equipment market. Ag equipment is what's experiencing a boom right now, the small tractor market (where mahindra is solely located) is what's going to take a hit in the U.S.

Mahindra sells a lot of tractors to third world countries and that's not where the money is located. I'd imagine most of their volume is from cheap, no-frills tractors that don't bring a lot of profit. Mahindra worldwide will probably do OK, but it's U.S. division will take a big hit with the upcoming hard economic times due to the fact that they only sell homeowner machines.

I disagree that the small tractor isn't booming. Everytime I travel a different stratch of road around here I spot a few more tractors under 70 hp, including on farms. There are more people with a tractor in rural ny than without. The montana dealer just north of me is selling around 15-20 units / yr. Not bad considering there are JD(2),CASE, MF, Mahindra, and branson dealers within 70 miles of him. I think all of them are selling quite a few tractors.

 

[MessickFarmEqu]

I was emailed this recently... here are some changes that happened in just the last month.

1. AGCO branded compact tractors were discontinued
2. New Holland - updated horsepowers on several T models
3. Ditch Witch and Vermeer both companies have withdrawn from the excavator market
4. John Deere - added new narrow, orchard, and vineyard models sourced in Italy.

So I guess we can add AGCO as another company who has pulled from the compact tractor business. No big deal for customes, as they still sell those models under their other brands. Just more proof of the kind of shakeups that I think we are going to be seeing in the not too distant future.

 

[WilliamBos]

I was emailed this recently... here are some changes that happened in just the last month.

1. AGCO branded compact tractors were discontinued
2. New Holland - updated horsepowers on several T models
3. Ditch Witch and Vermeer both companies have withdrawn from the excavator market
4. John Deere - added new narrow, orchard, and vineyard models sourced in Italy.

So I guess we can add AGCO as another company who has pulled from the compact tractor business. No big deal for customes, as they still sell those models under their other brands. Just more proof of the kind of shakeups that I think we are going to be seeing in the not too distant future.

Well I am not sad to hear that. I am glad they did that, because they are focusing on making MF the number #1 brand, and by chopping the AGCO compacts, that is less in house competition. From what I understand the Challanger compacts are aimed at Fleet rental places?