The following story is an excerpt from the 40-page 2017 Rural Lifestyle Dealer Business Trends & Outlook Report. Email Lynn Woolf for a copy of the complete report, lwoolf@lessitermedia.com.
Kubota dealers are very positive about the year ahead and think tractors less than 40 horsepower, zero-turn mowers and skid steer loaders will be in demand.
Kubota dealers are even more optimistic than North American dealers as a whole. More than 92% of Kubota dealers think 2017 will be as good as or better than 2016, compared with 84% of North American dealers who expressed similar sentiments. More than 56% of Kubota dealers expect total revenues to increase 2-7%, compared with about 40% or North American dealers.
Some Kubota dealers are pessimistic. About 8% expect revenues to decline 2-8%, compared with 16% for North American dealers.
Kubota dealers are even more optimistic about aftermarket revenue in 2017, with none of the responding dealers forecasting declines. About 20% expect aftermarket revenues to increase 8% or more. For North American dealers, about 13% expect aftermarket revenues to increase 8% or more and 9% expect decreases of 2-7%.
Kubota dealers rank tractors less than 40 horsepower at the top of the categories in terms of unit sales potential for 2017, followed by zero-turn mowers, front-end loaders, skid steer loaders, and rotary cutters.
Kubota dealers rank these categories at the bottom of the list for unit sales potential in 2017: manure spreaders, ATVs, wood handling equipment, feed and fencing.
Half of Kubota dealers expect to add skid steers to their lineup and more than 31% expect to add zero-turn mowers.
Kubota dealers see good brand awareness and customers respect their expertise. Nearly 70% of Kubota dealers say customers have a brand in mind most of the time or almost always when they visit their dealerships. That compares with about 62% for North American dealers overall.
About 92% of Kubota dealers say customers accept their recommendations most of the time or almost always when they visit their stores, compared with about 77% for North American dealers overall.
Nearly all Kubota dealerships have salespeople focused on the rural lifestyle market and about 34% employ either 5 or fewer full-time service technicians or 6-10 full-time service technicians.
Hobby farmers/large property owner and turf/lawn landscape contractors are the two most important segments for Kubota dealers.
See the charts below for additional details as well as comments from Kubota dealers.
Kubota Commentary:
What’s the best mistake you ever made and how did it change your dealership or how you approach business?
“Firing someone that everyone said we could not survive without. I replaced them with an employee who has a positive attitude.” … “As a small business, it becomes common practice to take shortcuts as it relates to some actions that ownership may take that can affect the accounting in the business in the medium- to long-term and that may result in a lot of explaining during an audit. We learned the hard way on what some ‘old school’ business practices can impact the financials, valuation, etc., of a business and the importance of running a tight ship if the dealership is on a growth trajectory.” … “Reduced the number of brands and models within the brand I continued to carry. It reduced my parts investment significantly and increased customer fill rates, narrowed our customers’ decision-making and reduced our selling time. Results achieved are reduced inventory investment, increased sales & gross margins and, most importantly, final net profit increased by 40% plus. Best decision I ever made and I have happier customers, including less stressed and more productive parts, service and sales employees.” … “Stayed with a supplier too long. Eliminated them and picked up business by concentrating on other in house lines.” … “Adding a construction equipment line. Although it was a known name, it was not our main line. We found that the philosophy of the supplier did not mesh with ours. We liquidated the line and moved on.”
What recent changes have you made in your service or parts department and how has it helped your dealership?
“Departmentalizing expenses, budgeting, sharing monthly data and reports. The managers are more aware and more effort to make things work properly.” … “In 2015, we moved into our new 21,000-square foot service center at one of our locations. This has most directly affected our ability to support our production ag customers. Most of all, it sent a signal to our market that we are a bona fide servicing dealer as well as our dedication to our market well into the future.” … “Our biggest issues came at the bottleneck at the service writer position in the number of transactions that needed to be processed by one person and the follow-up customer interactions. We have backfilled these people with additional counter staff; are retraining them to assist in the initial service transaction; moved the service writer to a different location to allow him to focus on service tickets, feeding the shop, and contacting with customers, with fewer walk-in interruptions.” … “Invested in additional equipment in the service center to help technicians work easier and more efficient. It has increased their billable hours by 20% plus.” … “Specialization of techs and two different parts counters to accommodate outdoor power equipment.” … “Improved lighting.” … “Adding younger more energetic people, to our front line to work with customers. Older, more experienced employees tend to be less flexible in their answers to customer problems. Younger employees seem to think out of the box and seem to show more concern for customer care.”
