Tractor-maker Same Deutz-Fahr GmbH speaks to Jason T
Hesse about the growing role finance plays for the company’s
sales.
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2009 has been a difficult year for
the agricultural market in Germany, not only for farmers, but also
for manufacturers of farming equipment. Same Deutz-Fahr GmbH (SDF),
Germany’s third-largest manufacturer of tractors, is no
exception.
Although 2008 saw business turnover rise above
€300 million for the first time, Rainer Morgenstern, SDF’s managing
director for sales, after-sales and parts, expects a reduction of
15 percent in 2009, and the same again in 2010.
Morgenstern, who is also chairman of SDF’s
management board, hopes that the launch of a new rental product
will help stymie the downturn in the market, however.
“We hope to increase our market share further
with the rental programme – this will supplement, rather than
replace, our retail finance and sales operations,” he says.
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By GlobalDataMorgenstern hopes that the product – the first
large-scale rental programme in the German agricultural market –
will reach 10 percent of the company’s sales within 18 months, on
top of the company’s current 45 percent retail finance penetration
rate. SDF has been partnered with BNP Paribas Lease Group (BPLG)
for its finance needs since over a decade ago, and the programme,
Same Deutz-Fahr Finance, has become a key part of the SDF
business.
“We started working with BPLG 11 years ago.
Working closely with the lessor has enabled us not only to increase
sales, but also the penetration rate of the retail financing, which
was then below 30 percent,” Morgenstern explains.
For the last two years, finance activity at
SDF has steadily picked up, however, thanks to BPLG creating a
dedicated team for the SDF brands – which include Deutz-Fahr, Same
and Lamborghini in Germany – in SDF’s German head office in
Lauingen, in Bavaria. SDF Finance employs four area managers, who
work with SDF’s salespeople and dealers to boost sales.
“In our business, speed is important. If a
customer has questions about finance, we need to react quickly to
prevent them going to see the competition – we aim to get finance
decisions back within 12 hours,” he says.
To ensure the finance operations work as
smoothly as possible, all of SDF’s area managers and the head of
SDF Finance meet every six weeks to discuss the company’s business
plan in terms of sales, marketing and finance offers. The new
renting programme, launched at the Agritechnica trade fair – the
largest agricultural trade fair in the world – at the end of
November is one such offer.
“It’s a very special programme,” Morgenstern
explains. “In my opinion, renting will become more and more
interesting for our customers in the future, as it addresses our
customers’ liquidity and balance sheet issues.”
He believes that since the rental model is
successful in the forklift and trucking industries, it should also
pick up in the farming industry.
“We’ve really gone on the offensive to train
our dealers so that they can make money out of this – we now want
to implement the renting product before our competitors pick it up,
too.”
