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Agco Plans “Reduction” Of Brands

Afarm equipment giant built on accumulation of product lines worldwide has announced a new strategy expected to lead to “reduction” of many of the company’s brands.

In a release Nov. 13, the North American Equipment Dealers Association said it was alerted to “major brand changes” within Agco – including the phase-out of the Agco brand itself – over the next couple of years.

Instead, NAEDA said, the company plans to focus its marketing on “comparable Massey Fergusonand Challenger-branded products.”

NAEDA, which said it released the information with Duluth, Georgia-based Agco’s approval, added that the overall effect of the plan is still “unknown.”

However, the Missouribased association said, “dealers will have several options to consider in continuing their relationship with Agco.”

“We support Agco’s efforts to inform its dealers about these changes and allow them sufficient time to determine a proper business strategy to shape their future,” NAEDA CEO Paul Kindinger said in the association’s release.

NAEDA is the affiliated organization of 18 farm equipment dealer associations in Canada and the U. S., including the Canada West Equipment Dealers Association. It said it was informed of Agco’s plans through a letter sent to Agco dealers.

Agco was formed in 1990 through a management buyout of Deutz Allis from Kloeckner-Humboldt-Deutz AG. The new company began marketing farm equipment under the Agco Allis and Gleaner brand names.

The company went on to acquire a long list of other noteworthy names in farm machinery, among them Hesston, White (1991), Massey Ferguson (1993-94), Glencoe, Tye, Farmhand (1995), Fendt (1997), Spra-Coupe, Willmar (1998), Ag-Chem (2001), Challenger (2002), Valtra and Sisu Diesel (2004).

Agco has previously said it recognizes “the tradition and value of brands, the loyalty of our customers and the identification of our dealers,” adding that its “multi-brand strategy maintains brand value.”

Releasing results in October for its third quarter ending Sept. 30, Agco said “reduced farm income expectations and the weak global economy have dampened worldwide industry demand for farm equipment, with no improvement expected in the fourth quarter.”

The company posted third-quarter net income of US$10 million on $1.4 billion in sales, down from US$99 million on $2.09 billion in the year-earlier period.

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