Odd Dealership Activity

[Tupperville]

Something strange happening at the local Case dealerships.

Stopped by one Case dealership yesterday and I only saw one used tractor. (large empty lot)

They (whoever the ones making the decisions are), seem to be blending in cheap off-shore tractors of the same color with what they do have to offer in their own brand.

Last time I ordered Ford parts this company called "Delta Power Equipment" was in control of my order and most of my parts had "Made in China" on the labels. I had no problem with the "Made in Mexico" air filters.

I researched the parts company name on the box and it is a NYSE listed company.

I know a bit listed companies and it's all about the quarterly results.

It seems the agriculture equipment sector is turning into one big Amazon or Black Rock.

And it's not just in farming, all the care homes here in Canada are being bought up by a few major players.

Does this not alarm you?

 

[DPittman]

Yes it does. When we bought the Hustler I’m using now someone told me we could get one much cheaper at the box store. The one I bought has and is performing wonderfully.
Wonder how many box store Hustlers aren’t. Sounds like equipment purchases may possibly be like a box of chocolates, never know what you’re gonna get.
My Hustler dealer did show me the differences in the box store mower and the one I bought.
The box store mower is cheap for a reason. This was in 2013

 

[Tgrasher]

Noticed the same thing at three area CaseIH dealers, two owned by the same big company. Might have to do with model change, might have to do with taxes. Keeping inventory increases costs. Used to really like going to a local big fair, Du Quoin State Fair, and look at enough machines to wear you out.

 

[rrlund]

With farms the size that they are now, I don't know that there's a lot of impulse buying on the big stuff. The folks making the buying decisions know when it's time to replace something due to hours or depreciation. They'll order for spring and take delivery when it gets here.

 

[Texasmark]

Noticed the same thing at three area CaseIH dealers, two owned by the same big company. Might have to do with model change, might have to do with taxes. Keeping inventory increases costs. Used to really like going to a local big fair, Du Quoin State Fair, and look at enough machines to wear you out.

As I understand it the "floor plan" i.e. units you have in stock to attract customers is financed by the local bank and they charge interest. Also, in some areas, in January the local tax entity taxes you on what you have, regardless of the fact that the bank owns the lot......"the lot".....the business (bricks and mortar) and the floor plan.

 

[JimB2]

Some very large farming operations order directly from the factory bypassing the local dealerships.
I believe the Poster lives in Canada because he mentioned Delta Power Equipment and that company operates 16 dealerships, 10 Caseih and 6 NH in Ontario, Canada. Usually any good used equipment that is not sold immediately in Canada is sold to the US market because of the 30% difference in US$.

 

[47fivewindow]

As I understand it the "floor plan" i.e. units you have in stock to attract customers is financed by the local bank and they charge interest. Also, in some areas, in January the local tax entity taxes you on what you have, regardless of the fact that the bank owns the lot......"the lot".....the business (bricks and mortar) and the floor plan.

I thought the manufacturer owned the equipment until the certificate of origin became a bill of sale or a title. After a preagreed free floor plan of 6 to 9 months.the dealer was forced to finance the cost to the dealer. This could be done through the manufacturers credit co. or a locl bank. The equipment wasn't owned by the dealer so state inventory tax wasn't applied. My employment at IH ended in 1981 so my memory may be wrong. How does it work today?

 

[moresmoke]

I thought the manufacturer owned the equipment until the certificate of origin became a bill of sale or a title. After a preagreed free floor plan of 6 to 9 months.the dealer was forced to finance the cost to the dealer. This could be done through the manufacturers credit co. or a locl bank. The equipment wasn't owned by the dealer so state inventory tax wasn't applied. My employment at IH ended in 1981 so my memory may be wrong. How does it work today?

Generally the ownership passes to the dealer as soon as the mfg loads the truck. Big corporate doesn’t want the assets on their books any longer than necessary. The mfg pays the interest on the floor plan for whatever the agreed program is. Typically end of season after the order in ag, or when the item is sold. After that, the dealer is responsible for interest and payments, or pay outright at that point.

The dealer doesn’t want the assets on their books either, but the flip side is you miss sales when there is no inventory. That is the conundrum of being a dealer in an uncertain market.