What's up with JD?

[Ledgemere Farm]

My dealer say sthere's alot of backbiting going on at Deere right now. I know one dealer was told by Deere they ddint have enough floor space. The Dealer had been in business for a long time. They sold out to a "chain JD dealership" that is building a bigger place down the road.

Just curious if anyone knew what the word on the street was.

 

[fgross335_2210]

There have been several discussions in this forum over the past 2-3 years about JD consolidating smaller dealer points into larger dealers. Probably just more of the same. Sad...

 

[JDPN]

Yea, it's called the new corporate America.....

 

[sixdogs]

I think the idea might be to encourage the big dealer to have a number of locations and discourage/squeeze out the smaller guy that has the potential to or is providing price competition. Should one dealer then own all the nearby outlets, prices will hold much better--meaning higher--than they normally would otherwise.
That's why I have JD stuff but also Kubota so I am not bound to one dealer and their retail price.
It's a good monopolistic strategy without appearing as such and will either work big-time---or--- give further rise to upstart manufacturers. The start of Kubota was fed by the desire of the majors to force the consumer to take their product at their price and like it. Yeah, that worked .
Rural folks are smarter than that.

 

[unreconstructed]

Parts man at the local JD dealership told me JD had tried to get the owner of his store to buy a couple of stores in the surrounding area--smaller stores. He would not do it.

 

[Ledgemere Farm]

I have seen several instances in Maine whereas one John Deere dealer owns several franchises. I can't think of a Kubota franchise...

 

[billb3]

JD just bought the dealership 30 miles from me to keep it from going under.
6 months later and they are still Kubota dealers as well.

There were 4 dealers within 30 miles, now there is two.. The other one used to have good deals a football sized field of new and used equipment. The field is empty and they have just a 2520 and 2305 out front outside.
Agway and the other feed store is gone, too.

 

[sunnyside360]

Haven't heard anything official, but as of two/three years ago all the smaller local JD dealers within about 100 mi radius from here are now owned by two very large dealerships. All the smaller single ones are gone. So, one can connect the dots on this question.

 

[MessickFarmEqu]

The start of Kubota was fed by the desire of the majors to force the consumer to take their product at their price and like it. Yeah, that worked. Rural folks are smarter than that.

At Kubota's beginings they where actually more expensive than just about anyone. Their rise was really two things, 1st - quality that was not offered by other companies, 2nd - building what the customer wanted rather than building what you think they should have. Their explosion really came in the last 10 years when they started bringing compact tractors to the mass market, rather than the farming community. Unless your Walmart, you don't win the war simply by being cheap. You do it by offering the best value, and no one can question that they've done that better than anyone else.

Deere has had a policy of consolidation for awhile. Its caused alot of hard feelings. They have ranked at the bottom of the AEM chart of dealer to manufacturer relations for awhile. What they are after is a Catapilar like business model where the OEM has more control over retail prices because they are using few large "distributorships". That business model is amazingly profitable when customer blindly buys your products without considering other brands, the goal is to control inline competition and preserve the profit margin.

 

[keerym]

Deere has had a policy of consolidation for awhile. Its caused alot of hard feelings. They have ranked at the bottom of the AEM chart of dealer to manufacturer relations for awhile. What they are after is a Catapilar like business model where the OEM has more control over retail prices because they are using few large "distributorships". That business model is amazingly profitable when customer blindly buys your products without considering other brands, the goal is to control inline competition and preserve the profit margin.

Messick is partially correct when he says Deere is persuing a Cat (spelled Caterpillar) business model. What works for Cat is their customer base. Its not that they purchase blindly, there is plenty of competition on products. Their customers are pretty demanding and don't usually want to deal with mom and pop dealers. The bigger stationary customers like mines and quarries have large service needs that aren't easily satisfied without the major investments of mega dealers. Smaller landscapers and construction contractors also benefit from the parts and service capability of these large dealers. This is also becoming the case with technology being incorporated into farming practices - Deere's real focus.

Kubota has done well focusing on the property owner. They have grown just as this segment of the market has grown. Kubota does not always have the best products, but they typically offer a trustworthy value. Their distribution system (dealers) also works well with the market segment they target. They too could use a little more consistency from dealer to dealer and a little bit better parts availability.