Along with answering four “yes or no” questions in the Farm Equipment survey on OEM pressure to order more new equipment than dealers wanted to order, dealers were offered the opportunity to “tell their story” and provide some detail about the pressure they were or were not faced with to increase their new equipment inventories.

“We have only ordered equipment that we need. As the year goes on, I am sure the pressure from the OEM will increase. By the end of the year, they will want to be partners again.”

“I have been offered open-ended terms for an order and get it in writing, but I’m still a little uncomfortable with it. I generally order what I am comfortable with, but each month the major sends a rep in here to tell me what I should order.”

“We have ‘met in the middle’ at times and other times we have just held firm to not order, which our Case IH rep does not like. Our new inventory is at a manageable level. We have a decent relationship still, but it does get intense at times when we don’t order what they want us to.”

“Deere always pushes to stock up. All new equipment gets terms, but the terms do not last forever. Deere wants dealers to be their warehouse. We order up and stock it, then give it to other dealers who did not [stock up] so they can sell it! Putting a lot of pressure on the dealers right now! That is the new way!”

“Our supplier is offering longer terms and extending terms on new equipment. I don’t believe in kicking problems down the road to keep them happy. If we order too much new, we will build used and get into the same problem we have been 2 years in fixing. We order what we need. OEM is not happy.”

“We have participated on a few occasions if the incentives were intriguing and we could formulate a plan to sell the new and associated trades. Mostly, we have stood our ground and made decisions we feel are appropriate for our trade area.”

“I respond, we have to do what we can to survive this downturn in ag. If you pinch me now, I might not be so willing to order your product when the high times come around. Be nice to me! If I treated my customers the way I'm treated today, I won't have a customer base tomorrow. I noticed my local boat dealer was told by a certain manufacturing company that he had to order 16 boats or roughly $2.5 million worth of boats. He responded, ‘See you later’ and walked away. Note: He's still has his doors open and doing just fine. You want service for your Mastercraft have a nice 45 mile drive.”

“I am refusing, with help from the manufacturer’s wholesale credit unit.”

“I wrote no to incentives on last question. But instead funds that used to be just available now are tied to you ordering to certain levels or you don't get [it]. I call it the carrot method. You have to order X items to get the carrot. But you can't take a bite of the carrot until you actually sell the item. If you don't sell enough to eat the whole carrot, then it spoils. Meaning you lose it if not used.”

“Case IH reps won’t even take you out to lunch! You better order more equipment or they will threaten to cancel you.”

“When I say our new inventories are too high that only applies to new skidloaders with New Holland as well as Kubota. NH is still putting pressure on us to order more than what we need! Kubota has backed off.”

“With Case IH, big picture they presently are putting less pressure on us vs. the last couple years, however, they are presently demanding more orders for precision planter parts, this is frustrating in lieu of the present agreement that Case IH has with precision in that these parts are distributed through seed and or chemical dealers as well and they bundle these with seed and chemical orders so that we are not competitively priced. We are also getting pressure to order more corn planters than I am comfortable with. With CNH Capital we have not seen any extension with terms and their interest rates to the dealer for floorplan have been significantly higher than the rest of the industry!”

“Kubota demanded too many skidloaders to be ordered with their initial introduction, however, they have extended the due date without interest on these skidloaders.”

“I know we are missing out on the incentives, but we have stuck to not ordering any new inventory from New Holland. Territory inventory levels are high enough. It will be a wait-and-see approach. They want you to have a 2 year supply on lot. We can't even predict 6 month sales.”

“We have been stocking more than we are comfortable with to make sure we can hit the market share goals set for us.”

“We feel forced to order the minimum amount to get the maximum discount. If we don't, other dealers of the same brand will have the product at a more competitive price and will price dump them in our AOR. That hurts our market share and negatively impacts our year-end volume bonus payout.”

“We have a 'terms bank.' It was what we thought was a perfect solution, however in order to participate we must order what the manufacturer requires. This means a level of stocking tractors 50% higher than we have ever previously stocked. It is like being hooked on drugs; once in the program, we now can’t get out without putting all of our inventory in dealer paid. I do admit our sales are up, but so is the under 100 HP market. The problem is the company will never admit to a market decline, when it comes, and the required orders will continue. That is a bridge to be crossed or burnt later.”

“Territory and regional managers in Case IH continue to pressure dealers as they are pressured from Racine, Lake Forest and Turin to generate more dealer orders. Note, comment in recent dealer letter about ordering to retail demand plus ending inventory.”

“RESIST, RESIST and RESIST having inventory dumped on us.”

“Why don't the majors stock equipment if it is such a great idea to have equipment on hand? Let them pay the interest.”

“We just say no, then we lose our early order discounts and our carry-over discounts especially for hay and forage orders. We feel when we refused to order to OEM targets, we are ostracized by our major supplier and future discretionary money is not offered to our dealership.”

“Our manufacturer does not adjust their expectations of equity percentage when large deliveries come in for new equipment or their rental returns which we have to take into used equipment.”

“We are only ordering to meet our comfort level. I can tell my the amount of company inventory they will want to be partners again at the end of the year.”

“Manufacture not doing anything to bring programs in line with our competition while at the same time expecting new inventory orders.”

“As NH dealer, with ordering pressures exerted by sales rep in order to meet a stocking parameter that rewards through quota and a new contract that cedes dealership inventory controls to CNH, if signed, my future is unsure.”

“We are an AGCO and Versatile dealer. We have pressure from Versatile to load up on equipment.”

“We are only ordering what think we need. Excess new inventory breeds excess used inventory!”

“CNH has offered wholesale and retail discounts (much more concerning) for taking inventory from company stock. This practice will regularly price our aged new inventory significantly above the market. Also, the partnership program is an arbitrary methodology based on some type of qualitative analysis … and who knows what parameters? Due to the discounting provided to dealers, this program is likely in violation of many state statutes. Last year, our sales increased slightly due to CNH discounting. This year, we are not expecting business to improve since we seem to be 10% out of the market in every product. Yes, John Deere is significantly below our pricing. We actually thought business would be better but we could have not anticipated being so far out of the market on our pricing. Business sure ain't fun right now.”

“It feels to us that our major CNH doesn't really care. Absolutely no help when we ask. We're on our own.”

“New Holland dealers are being required to have 18 months of new inventory. 12 months and 6 months forward.”

“We have made the decision to stop playing the order game and just order what is needed when it is needed.”

… But Not All are Negative

“Case IH had the partnership program for about 2 years, but this has been phased out. But overall we have not felt that pressure. In fact, we have ordered equipment on our own that we feel we’ll need for later in 2017 and early 2018.”

“We believe that you cannot sell from an empty basket and tougher times are no exception. With used equipment turning at 3.5x, we feel we have reached a good balance. We’re stocking products, be it at low levels, for all categories that we represent from our major and are receiving very little, if any, pressure to add to our inventory.”

“We are getting limited incentives to order but keep everything in perspective with our overall budget and marketing plan. What can we move in our market and how many. We stay under that number. Our TM has a balanced approach.”

 “We are back in the days of the ‘60s & ‘70s with our OEM`S telling us how to
run every aspect of our business just as they did with their company stores. We all know how that worked. The only difference now is they are using our checkbook instead of there’s!”

 “Case IH has asked us to order to qualify for certain selling incentives and terms but not more than what I feel is reasonable or what I needed to have. They have been very reasonable in extending terms on units they had asked us to order.”

“I feel that this time around through the down agricultural cycle our OEM, Deere, implemented a better strategy. Reduce production sooner rather than later to keep from having to force dealers to stock more than they should be at this time. This surely proves to be beneficial a couple years into the downturn. Less aged inventory and faster turn around to start having to order new stock inventory again.”

“12 months interest-free floorplan.”

“The only area that our OEM is pushing inventory is compact & utility tractors. To this point sales keep climbing and the strategy is working.”

… and Some Keep It Simple

“Just don’t return their calls.”

“No still works.”

“We have said we will order when we feel there is a chance to sell it.”