McCormick wants to sell more tractors

McCormick brought a raft of new tractors to Agritechnica last week. A highlight were the three X5 models for the important 100-113hp segment, new X6 (110-126hp) and X6.4 (121-140hp) versions (offered with an in-house made CVT), X7 (new P6-Drive powershift) and additional features for the X8. Now that the product range is finished the attention has turned to the company’s dealer network. Argo Tractors wants more McCormick dealers was one of three main messages from the firm’s Agritechnica press conference.
 
“We do not have dealers in all regions of the world where we would like to sell our tractors,” said the Simeone Morra, one of the family owners of the Argo Group to which Argo Tractors belongs, “and we want to recruit more dealers from the competition and further professionalise our dealer network.” Some €10 million has been earmarked to improve dealer development. Strategic targets are to improve brand awareness and credibility, pull more customers into the dealer, and make the dealer’s job not only easier but also more profitable. The company also wants to reduce tractor downtime, improve technical field support and expand the Argo finance package.
 
One indication of the future is in Spain (Valladolid) where the company recently bought 7ha of land and erected new branch with facilities for customers and dealer training. We understand the plan is to replicate this in other countries.
 
The second key point to come out of the press conference is that McCormick wants to sell more tractors. “We want to remain true to our values but with a stronger international presence,” added Mr Morra. “We need to be in all areas of the world and exploit the McCormick brand in more global markets.”
 
Argo Tractors has enjoyed a good year in Spain, Italy and France. Turkey is also strong for the group, and Australia and South-East Asia are good markets. However, there are many areas of the world where the company is keen to promote the red brand, and it is no coincidence that next year’s XTractor tour is in South Africa, where the company sees potential to further grow its business. Another region the company is keen to exploit McCormick is North America, which has a huge history in the region. “We can do more business in the region,” commented Mr Morra.

Tractor manufacturers are always guarded when talking numbers, but we can reveal that the blue Landini brand accounts for around two-thirds of the roughly 17,000 tractors made each year at Fabbrico. The maximum the plant can produce on a single shift is around 22,000 tractors a year, and the company is clearly gearing up to increase volumes to this level as fast as possible.

Also, it is just possible increased tractor sales could come through joint ventures, like the recent ‘strategic cooperation’ between Argo Tractors and Anadolu Motor, to produce Landini tractors in Turkey. The Landini tractor production plant, which involves investments exceeding €10 million, will start operating in spring 2018, with the initial plan to build more than 6,000 tractors a year (50 to 110hp).

Freedom is the most important thing Argo Tractors offers its dealers was the third main message from the firm’s Agritechnica press conference. “We are not an implement maker but a tractor manufacturer and will continue as a tractor specialist,” said Mr Morra. “We have a great range of products, all we need to do now is let everyone know. We want to be more visible in the market.”
 
Make no mistake about it, the company is serious about attaining these ambitious goals, and is investing a lot of money in reaching them in the shortest time-frame possible “We want to be at the same level or higher as our competitors and want the market share our tractors are worth.”
 
Argo Tractors currently has 130 distributors, 2,500 dealers, eight branches, five Italian tractor plants, and when all three brands (McCormick, Landini and Valpadana) are added together offers 550 tractor models from 30 to 310hp. Mr Morra said 2017 has been better than expected for Argo Tractors. “We enjoyed a 13% increase in turnover this year, a 20% increase in orders, and are on target to achieve a 2017 turnover of €500 million (50% Europe/50% Rest of the World).”

The company takes pride in being a tractor manufacturer, not an assembly plant, and makes 75% (value) of components in house, including cabs. To do this it re-invests 5.5% of turnover in R+D each year (€25-€30 million a year) in product development and plant processes.
 
One result of this is the company’s first in-house designed and made VT-Drive (CVT) on show at Agritechnica, in the X6.4 (121-140hp). “We want to build our own transmissions for tractors up to 140hp,” said Mr Morra. “This gives us the edge and flexibility to control the quality and time to market.” 

Finally, on the precision farming front, some of next year’s spend will be invested in digitalisation, which falls under the Future Farming 4.0 umbrella. Also, Argo Tractors is just signing a worldwide agreement with Topcon, in a deal that means it is no longer just a simple supplier but now a real partner.

McCormick wants to sell more tractors

Thursday, 23 November 2017

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