AGCO: A new way forward for distribution in South Africa

Sponsored by AGCO
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AGCO, a world leader in the manufacturing and distribution of agricultural machinery, is adopting a two-tier distribution model that will make it easier for dealers and farmers to connect.

AGCO designs and manufactures iconic tractors and machinery for four core brands, namely Massey Ferguson, Valtra, Fendt, and Challenger. Photo: Supplied

AGCO, a worldwide manufacturer and distributor of Challenger, Fendt, Massey Ferguson and Valtra, has adopted a two-tier distribution model that will support South African dealers directly from the region’s headquarters in Johannesburg from 1 October.

The move to bring all business operations in-house is informed by a refreshed customer-centric approach, as AGCO draws closer to its dealer network.

The restructuring presents a great opportunity to unlock significant value in the distribution chain, empowering dealers to offer a more efficient service to farmers.

In-house distribution

To date, the distribution of AGCO’s Challenger, Fendt and Massey Ferguson brands on the local market have been subcontracted to BHBW, a Barloworld and BayWa company, while the Valtra brand has been distributed by Valtrac (Pty) Ltd.

The change in distribution is a phased-out process. First, Massey Ferguson and Challenger dealers will ‘lift and shift’ to direct accounts with AGCO Distribution Management.

This will be followed by the establishment of the first local dealer network for AGCO’s premium brand, Fendt. Valtra machines will, however, continue to be distributed by AGCO’s partners, Valtrac.

Dr Dominik Reus, managing director of AGCO Africa, explains: “Contributing over 40% of the African market, it was time to revise how we do business in South Africa. The enhancements we are putting in place will open direct lines of communication with our dealers. This will ensure a swift and effective distribution process from placing orders to delivering products, while keeping AGCO on the pulse of the market response to our product offering.”

Improving the profitability of AGCO’s dealers so they can offer farmers improved customer service is at the core of the revised distribution model.

The direct route to dealers will increase their competitiveness, as their success is based on individual performance and innovation instead of that of a distributor.

“Dealers will now have more control of their trade and the confidence that they have the full support of the designer, manufacturer and now distributor of their trusted agricultural machinery and solutions.”

AGCO is ensuring a steady pipeline of new stock for whole goods and parts from its international factories during the phase-out process to move distribution of all its brands in-house.

An invitation for expression of interest has been extended to all dealers of agriculture machines who understand what the Fendt brand represents and are willing to position their dealerships to deliver on AGCO strategic growth plans.

AGCO’s revised distribution model comes at a time when the world is facing a challenging economic environment with greater demand for food security and nutrition. It offers an opportunity for AGCO to contribute to the growth of a robust agriculture sector in South Africa.

Email the AGCO Distribution Management team at RSA.Distribution@agcocorp.com. Visit AGCOcorp.com, or follow AGCO on Twitter @AGCOCorp