From the Desk of Lynn Woolf: October 23, 2012

Five years ago, Bobcat described its decision to sell compact tractors as “a move intended to expand its number one market position in compact equipment.” In an exclusive statement to Rural Lifestyle Dealer, Bobcat says it is not renewing its OEM agreement with Daedong Industrial to market compact tractors under the Bobcat brand.

Bobcat’s statement:

Five years ago, Bobcat entered into the compact tractor market, using an outside vendor to manufacture the tractors, and branding the tractors under the Bobcat name. The five-year contract with our tractor supplier is ending, and we are not going to renew it. We have made the decision to exit the tractor business and focus on our core products.

Bobcat will continue to serve the acreage owner and personal use market segments with products like utility vehicles, utility work machines and skid steer loaders. Bobcat is also a market leader in buildings and grounds and landscaping market segments. We will continue to serve those market segments with our core products.

We realize this decision has an impact on Bobcat dealers. We are working with each individual dealer to assist with selling remaining inventory, and to help with the transition from the line of tractors. We will continue to provide customer support for Bobcat tractors through parts, service and warranty.

Behind the scenes, we’ve heard several reasons behind the decision. We’re confirming now and will share what we learn.

The bigger question centers on a major brand shift, in opposite directions, in just five years. Bobcat hasn’t been around for 50 years without being smart and strategic. However, compact tractor demand is high. In our 2012 Annual Equipment Forecast & Business Outlook survey, dealers said tractors under 40 horsepower and from 40-100 horsepower were among the top five products for increased revenue this year. What will this decision mean for Bobcat dealers’ sales and what are Bobcat’s recommendations for replacing this revenue?

Dealer reputation could also be at stake. It will be difficult to sell remaining compact tractor inventory and what’s to be said to the rural lifestyler you sold a Bobcat tractor to this summer?

We know Bobcat will stand behind the tractors in the market. The weight is now on dealers to communicate with customers, prove that support, and convince them to come back to the dealership for other equipment that can get the job done.

What do you think, Bobcat dealers? Is this the right decision? What will it mean for you?