John Deere to cull a significant chunk of its dealer groups?

It has been widely reported during recent weeks that John Deere has informed its European agricultural equipment dealers that it plans to reduce the number of dealership groups by between one fifth and one third (i.e. a 20-33% reduction).

A report from publisher Ag Equipment Intelligence says that John Deere “expects [remaining dealer groups] to double their current tractor area, meet a €100 million turnover target and sell 30 combines and 15 foragers every year”.

This tallies with details from a statement issued by well-known UK-based dealer – Sharmans Agricultural Ltd. It issued the statement (online) earlier this month, notifying its customers that the business would “not continue to be a John Deere dealer” – effective from October 31, 2020.

The statement – published on the company’s website – is pictured (below):

Image source: Sharmans Agricultural Ltd

In the statement, the company describes John Deere’s decision to serve notice on it as “brutal”.

Described as ‘brutal’

Sharmans Agricultural Ltd says that it first learned of John Deere’s latest global ‘Growth Strategy’ at a dealer meeting at Agritechnica, which took place last month (November) in Germany.

The statement claims that, at that meeting, “all 350 European dealer groups were informed that – in future – there would be a reduction of approximately a third to a fifth of current dealer groups”.

It also lists the following future expectations – apparently stipulated by John Deere – for dealer groups:

  • Double current tractor area (varies by dealer);
  • €100 million turnover;
  • 30 combines, 15 foragers; to be sold each year.

Even here in Ireland, we’ve already seen a move (albeit on a somewhat different scale) toward larger and fewer dealers, with the remaining (enlarged) dealer operations each having multiple outlets.

A prime example of this is John Deere dealer group TFM (Templetuohy Farm Machinery), which now covers a vast swath of the country (stretching from Wexford to Galway) through multiple depots.