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Inside AGCO, Part Three: AGCO seeks market share growth

Inside AGCO, Part Three: AGCO seeks market share growth

AGCO's tractors are the clear market leaders in Europe. Now the company wants to take the lead in the North American market.

Editor’s note: This is the third in a series of reports from a recent roundtable with AGCO executives about the company and where agriculture is headed.  

AGCO’s market positions are stronger in Europe and South America than in North America. “As far as brands as a company, we have a leadership position in Europe,” reported Steve Koep, vice president of marketing. “Fendt and Massey Ferguson are the clear market leaders in Europe, accounting for 25% to 35% of market share. Massey Ferguson is the clear leader in South America with 60% market share.”

“In North America, we are the third player overall, but there are segments where we lead,” added Alistair McLelland, vice president of distribution development. “Haying is one of them, especially the large commercial-type square balers and self-propelled windrowers.”

The key to attracting more North American customers is to educate them about the driving advantages of the tractors, according to Jason Marx, vice president of marketing. Customers and dealers need the opportunity to drive both AGCO and competitive brand tractors. “We don’t design our products for the middle of the road,” he said. “Most of our stuff is highly engineered, so when these farmers step into something that is middle of the road, they can sense a difference.”

Massey Ferguson is perhaps the oldest and best-known brand in the United States, Marx added. Customers will see AGCO’s marketing efforts center on the brand starting the second half of this year and extending into 2012.

Future growth
McClelland said that, through 2006, growth of the company was achieved primarily through brand acquisitions. “The last major equipment acquisition was Valtra,” he said. “Prior to that, we were making one-plus acquisitions per year.”

The multiple acquisitions led to a large number of dealers and a fragmented distribution network consisting of Hesston-only, White-only, and Sunflower-only dealers, he said. The company is now consolidating and there are not many areas where AGCO does not have a footprint.

Training initiative
Koep said Fendt is known as a technologically advanced product. As more of the Fendt technology is integrated into tractors here, there will be a greater demand for technicians who are trained on that technology. The new Global Learning Center is designed to meet that need.

For example, Koep said AGCO technicians now use a technology called the Electronic Diagnostic Tool to tap into the equipment’s on-board computers and diagnose equipment failure. “You know you are in trouble when a technician shows up with a crescent wrench because chances are the problem is not something that is physically broken,” Koep said. “Even simple equipment now is electronic. So we are focused on providing technology and training.”



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