AGCO’s acquisition of the Challenger brand from Caterpillar in March 2002 has important and positive implications for both Companies. There are significant mutual benefits. Caterpillar dealers around the globe will have access to an increasingly wide range of Challenger agricultural machinery supplied by AGCO and will be able to diversify more powerfully into the agricultural machinery market.
And AGCO has added another prestige brand to its portfolio, offering increased sales in markets where AGCO is already strong, and also in markets where the Caterpillar Dealer operation is strong.
Challenger’s launch as a separate brand by AGCO Corporation reflects the Company’s further development as one of the world’s largest suppliers of agricultural equipment. The acquisition of the Challenger tracked tractor range and the Challenger brand from Caterpillar also represents a significant opportunity for AGCO to develop distribution and sales of complementary products into the global high acreage, arable farming sector.
From AGCO’s perspective there are 2 key issues:
- What is AGCO’s strategy in terms of the sales and distribution of Challenger MT 700 and MT 800 tracked tractors?
- What are the global implications for the development of a much wider range of Challenger agricultural machinery? How will that fit alongside the Company’s other leading brands such as Fendt, Massey Ferguson, Ag-Chem and Spra-Coupe?
AGCO’s Distribution strategy for MT 700 and MT 800
The special nature of the Challenger products themselves is driving AGCO’s Distribution strategy.
In Europe, the Challenger line-up will include two families of tracked tractors. The MT700 range features four models between 235hp and 306hp. The MT800, to be introduced later this year, will feature four models ranging from 340hp to a massive 500hp.
The Challenger MT700 is one of the most productive and technically capable tracked tractors in the world. Once the MT800 is launched in late 2002, the Challenger tracked tractor will also be the most powerful farm tractor in the western world. A demonstration, if any were needed, of the drive to greater efficiency and minimum operating costs amongst large arable units globally.
Special farmers operate Challenger tracked tractors. They demand special dealers with high levels of skill and customer service, and special after sales support.
New Challenger Dealer Network in Europe
With this in mind, AGCO is already establishing a new European distribution network to handle Challenger products. Challenger dealers have been and are being recruited from Caterpillar and AGCO networks, as well as those currently holding competitor’s franchises. Completely new dealers are also being considered.
Challenger dealer requirements are tough. They have to possess outstanding customer satisfaction capabilities. It’s intended that the new Challenger distribution network will provide a level of support that will exceed the expectations of the world’s most discerning farm machinery customers. Dealers are required to make an uncompromising commitment to the level of service and support they provide.
In Western Europe, where AGCO brands already have a strong market position, Challenger tracked tractors perfectly complement the other brands and initially are likely to be the principle Challenger offering. Outside of those markets it is likely that the development of a wider range of Challenger products will be particularly accelerated.
Challenger – Global Distribution Strategy
The same strategy is being applied elsewhere in the world, exploiting the mutual strengths of both the AGCO and Caterpillar distribution and logistical support operations.
In the USA the Challenger range has already been expanded to include a wide range of other AGCO produced agricultural equipment. The Challenger range is being sold through the extremely professional Caterpillar dealer network who until now have only been able to offer their customers the tracked tractor and a combine. Now they have access to a full line of high quality farm machinery, enabling them to fully compete in the agricultural market.
In Eastern Europe, and CIS countries, Caterpillar dealers have established a strong network and Challenger has provided them with an opportunity to expand into the developing agricultural markets. This complements AGCO’s operations in those markets.
In Africa and the Middle Eastern markets both AGCO and Caterpillar are strongly established. Each region and franchise will be considered on their individual merits ensuring that Challenger gains access to the main productive farming areas.
Special AGCO people
The nature of the Challenger tracked tractors has also guided AGCO’s approach to developing the teams of people dedicated to the development, manufacturing, sales and technical service of Challenger equipment.
The Company has employed leading people in the tracked tractor field to manage the development of the MT 700 and MT 800 in Europe. These people include Volker Friederichs in Germany, Walter Remondini in Italy and Andrew Rabett in the UK, all well known amongst existing Challenger owners and potential Challenger customers.
This reflects the fact that Investment in a Challenger tracked tractor is a not a conventional tractor purchase. It is more often an investment in an entire mechanisation system. Challenger product specialists therefore act as mechanisation consultants rather than salesmen, skilled and capable of guiding customers through the investment decision, providing support on agronomy and the various financial and commercial considerations and benefits.
And they are backed by the industry’s best Parts supply and backup operation.
Challenger customers are amongst the world’s leading ‘production’ farmers who expect the highest possible level of service and support, always to harvest standards.
A network of AGCO Parts warehouses, in strategic positions throughout the world, linked to a single computer network, is able automatically to track down and order the part whatever its location. Within Europe, AGCO serves customer demand for parts from Parts warehouses in the UK, France, Germany and Italy, operating overnight delivery services across the continent. All part of the special support for very special machines.
