19 March 1999

Claas claims a bigger share

It has been a tricky year for

most manufacturers – and

the year to come promises

much of the same.

Andy Collings pinned down

Claas UKs chief executive,

Clive Last, to discover his

views and aspirations

TO most other leading machinery manufacturers at least, Claas must appear to be something of an anachronism.

While most players have seen their turnovers decline dramatically in recent months, Claas claims to have increased its turnover by 13%.

The company also claims to have maintained and, in some areas, increased market share for its range of grassland and grain harvesting equipment, and stepped up production to the point where an extra 500 employees have been required.

According to UK boss, Clive Last, a third of all combines and half of all forage harvesters sold in Western Europe in 1997 were built by Claas during the companys fiscal year.

Pleasing, as these results must clearly be, it is not all good news. Net income for the company fell by some 13% – from DM 135m to DM 117m – and Claas UK had to weather a 17% fall in combine sales on the home market.

Overall though, Mr Last feels his company has performed well.

"While sales of smaller kit have dropped off, demand for our larger combines, self-propelled foragers and wider tedders and rakes has held up," he says.

And just to demonstrate that 1998 was the year where size did matter, Mr Last points out that sales of the Claas Challenger crawler has exceeded his expectations.

"Our decision to form a joint venture with Caterpillar has proved successful," he insists. "Where we have sold say, a high capacity Lexion combine, the ability to offer a high-powered Challenger has been a logical option for more than a few growers.

"The two machines are, if you like, self-supporting and with 50 Challengers sold in the UK last year, they have provided a useful addition to the accounts."

In the states, where Lexion combines are sold in Caterpillar livery, the opposite is occurring, maintains Mr Last. Users of Caterpillar Challengers are being targeted to purchase the Lexion combines.

Still on the tractor front, the gentlemans agreement with Valmet to provide mutual support at dealer level – a conspiracy to contest the full-line policy of the big four tractor manufacturers – would appear to be working.

It is an arrangement which Mr Last now says he would be prepared to emulate with an implement manufacture.

"If the product works in well with our image, then we could be very happy to be associated with it," he says. "The arrangement with Valmet proves both parties can benefit."

But there is one Claas development which continues to challenge the sales ledger. While most would agree that the multi-function Xerion as a technological piece of engineering is an impressive machine, few it seems are prepared to buy it.

"For the Xerion to succeed, it will have to be cost-led," insists Mr Last. "If things get really tight financially, growers might just be convinced to use a vehicle which can be kitted out to perform a wide range of tasks."

And now for the matter of the telescopic loaders. "We needed telehandlers for additional dealer revenue as much as a new Claas product. We could have been happy working with JCBs products but we needed a Europe-wide partner and JCB needed to serve construction as well as agriculture.

"Our acquisition of the Sanderson business clearly cut across JCBs lineup and the company took the decision to withdraw its franchise from the majority of Claas dealers – which I still find disappointing."

So, what for the future? Mr Last, although wary, is optimistic for UK farmers. "The future lies in big kit operating on big farms, where efficiency can be increased," he says. "This does not mean farms being bought up but groups of farms being managed as a single unit.

"A drop in subsidies will not spell the end. UK farmers, in the main, are ahead of the game when it comes to adapting to financial changes, they have had earlier experiences. For Claas, we shall continue to concentrate on supplying a range of machinery which should, we hope, enable farmers to make reasonable profits. If they do not, then we are all out of business." &#42