Dealerships will halve by next year, says Claas
By Andy Collings
BY this time next year, the number of agricultural machinery dealers operating in the UK will be half that of 1997, predicts Claas UK chief executive, Clive Last.
"With revenue down by 35% this year and a further fall of between 10% and 15% expected next year, it is a case of survival of the fittest; the machinery market is over-subscribed and some dealers will be forced to go."
Even so, Mr Last describes his own companys year as being "tough, yet successful". It has also been a year in which Claas has broadened its machinery range to encompass the Caterpillar Challenger, telescopic loaders (production of the Claas Teleporter is now on stream at Saxham) and the introduction of high capacity grass machinery.
Changes have also seen Claas dealers being offered Valtra tractors to provide them with what many see as an essential tractor input to a business, but not one that has the potential of conflict with Claas products.
In short, it is an arrangement which cuts across the current "full line" policy of the big four tractor manufacturers.
But one thorn in the side could be the JCB issue. According to Mr Last, JCB decided it could not tolerate the presence of Claas teleporters being marketed alongside its own line-up and, as a result, has withdrawn the franchise from Claas dealers. This will terminate later this year, with Claas retaining service agreements for a limited time. JCBs future marketing arrangements have yet to be announced.
So, how has Claas UK fared overall during the last year. Its year end is deemed to be the end of harvest and provisional estimate for the total number of combines sold in the UK by all manufacturers is 1100 units, 17% down on the previous year.
"This is still a healthy market for Claas when our high market share is considered," says Mr Last. He adds that his company also held on to its share of forage harvesters sold, and the introduction of the Challenger range also helped to protect revenue.
Without the inclusion of Teleporter sales, total revenue of Claas UK is put at £76m, a 28% reduction.
"By prudent budgeting, in anticipation of the fall in the market, we have been able to trim costs. Our pre-tax profit should be very similar to the £3m recorded in the last two years."
Mr Last concedes the year ahead in the UK will not be as buoyant as the last three years and points once more to the vulnerability of the dealer trade.
"We think we have acted early to reduce the cost of our dealer channel," he says. "Some of those who have been slower to react to the smaller markets might now have their resources spread too thinly to give the farmer the service he requires." *