Today it is possible to merge agricultural equipment companies and still keep their brands separate, as shown by the Case IH and New Holland merger. Case IH Vice President James Irwin told us in a recent interview that Case learned a lesson from its merger with International Harvester. “When we came together, we consolidated all the business,” he says. “Frankly, we alienated a number of customers. You don't take your customers for granted. I believe they still like a choice.”
So when red and blue merged a couple of years ago, the two lines were kept separate. “They will continue to be for as far as I can see in the future,” Irwin adds. The merged company, CNH, finds through customer surveys that two different types of customers are buying the different brands. Case IH customers tend to farm more land, whereas New Holland customers often have livestock operations and fewer crop acres.
Sales and marketing for the two brands operate separately, but research and engineering work together. When new products are developed, features unique to each brand are kept in the designs. For example, the forward-reverse on a Case IH tractor is on the left side, but it is on the right side in a New Holland tractor.
However, when the company makes a new type of equipment for a brand in which the equipment never before existed, it does not attempt to differentiate the new machines from the same machines in the other brand. Thus, the first planter in the New Holland line, which the company recently introduced, exhibits very few differences from the Case IH planter.
Down the road
Irwin expects any type of seeding and tillage equipment to be popular buys this year. No particular type of tillage equipment will hold the market, however. He says in some areas farmers practice strictly no-till, while other farmers want strip-till.
Another customer interest is in working the field with fewer passes and less compaction. This means ganging up jobs on one implement. Another hot area is in upgrading spraying equipment.
The tractor market is building more horsepower into its products, Irwin says. But he believes the industry is reaching the upper limits and is also focusing on transportation and maneuverability. “The farms are getting bigger, but not the fields,” he says. “I've talked to customers who move a planter from 20 to 30 different fields throughout the spring. So it is very necessary to have products that move quickly.”
The other tractor trend is toward low-horsepower lines. Case IH plans a move in this direction. Irwin hints that Case IH may introduce a new line of low-horsepower tractors this summer.
Irwin says that in the competitive ag equipment market today, the company is trying to reduce the amount of assets it has tied up in the supply chain. Two decades ago, a dealer kept a year's supply of product on the yard. Not so today.
“Today, we have by far the lowest inventories in North America, either at dealers or at our plants,” he says. “Well over 50% of the product we build is sold retail before it is built.” In addition, the company is trying to shorten the time from when an order is placed to when the product is delivered. Irwin hopes these steps will make the Case IH brand one that will stay around for many more years.