Editor’s note: This is the last in a series of reports from a recent roundtable with AGCO executives about the company and where agriculture is headed.
In April, farm machinery manufacturer AGCO hired Jason Marx as vice president of marketing for North America. Last month I got the chance to interview him one-on-one on everything from market share and distribution to the rumored CNH buyout.
Q. AGCO has gone through various phases of growth during its 21 years of existence. How would you describe those?
A. We went through the acquisition phase for the first 14 years, from 1990 to 2004. We’ve made some small acquisitions since then, but we were doing one to one-and-a-half per year. Robert Ratliff (former CEO) took us through that period of acquisitions, and now CEO Martin Richenhagen is constructing the house from the foundation that Bob put in place. When Martin came on, he put all of the companies together and launched us into the second phase where we are taking those companies and organically growing them. We’ve been doing that pretty aggressively for the last five to six years, making record investments in R&D and capital infrastructure.
What’s the next phase of growth for AGCO?
We will continue to grow those brands, and you will probably continue to see some acquisitions. Even our CEO has not been shy to say he is interested in all sorts of acquisition opportunities. But in addition we will be working on expanding our global footprint. We are very much a global company today, and you will see us emphasize that as we move into Asia, Africa, and India. Each of those markets may be at different stages in the equipment lifecycle and may require different approaches as far as how advanced the equipment needs to be, how large it is, and how much horsepower is required.
In North America, how has consumer perception changed in the last five to 10 years?
You should ask them that question. But I hope the perception is that AGCO is a serious competitor in the ag industry. We are one of the world’s leading, technologically advanced equipment manufacturers, and we manufacture a lot of equipment globally. I always go back to the Massey Ferguson brand as an example. Globally, Massey Ferguson has sold more tractors than any other brand for the last four decades. The market here in North America hasn’t reflected that in the last 10 years, so we are investing in reinvigorating that brand.
How does the Challenger brand fit in?
The Challenger brand, which is mostly distributed through our Caterpillar dealers as well as some non-Caterpillar dealers, is centered on tracked and articulated machinery but has now extended into haying equipment, high-horsepower wheeled tractors and large-frame tractors. Challenger is a professional producers’ brand of equipment that can help them achieve their goals and provide them with the technologies they need to feed the world.
What’s AGCO’s biggest challenge right now?
Anytime you acquire a lot of equipment lines, you end up with a varied footprint in your dealer and distribution network. Many of our dealers are second to none, but there are still some holes in our distribution map where we might not have dealer representation.
AGCO ranks third in tractor market share, behind John Deere and CNH. While there are many product lines in which AGCO ranks number one or number two, what is keeping you from moving up a place in tractors?
Honestly I think the challenge we face is getting the opportunity at the table. I’m confident that when people try our equipment and give us a real shot, they will realize the value we can offer them. People can get in a brand tradition, and it usually takes something to get them to say, “Hey, from a branding standpoint, I should give someone else a try.”
It has been rumored that AGCO is looking to acquire CNH. Any truth to that?
I don’t know what happens at Martin’s level, and you never know the discussions that take place. But what Martin was probably communicating is that he would be interested in CNH if it ever became available. I’ll leave it at that.
You indicated we can expect to see more acquisitions. Which companies are you considering?
I probably can’t share that with you in specifics but we are continually interested in and pursuing opportunities.