CNH’s crystal ball for Australia and New Zealand

Case-IH

The future of farm machinery is bigger and faster, at least in the foreseeable future, according to Ray Osgood, CNH Industrial’s executive managing director for Australia and New Zealand. Source: The Weekly Times

Mr Osgood said there was an “increasing appetite for speed” in the machinery market, an appetite he hopes CNH can satisfy as the company bends to customer demand.

In a one-on-one interview with The Weekly Times, Mr Osgood talks the future of farm machinery, where he sees Australia in the global market and what he wants to achieve out in the field.

HAVE WE REACHED A HORSEPOWER LIMIT OR WILL THE INDUSTRY KEEP PRODUCING EVEN BIGGER MACHINES?

It’s all about the law of diminishing returns. Have we reached the limit? I tend to think not, but we must be getting close. In the end if bigger means better and more productive machinery, then that’s what we’ll make, but the market will determine this.

WHERE DO YOU SEE MECHANISED FARMING IN 20 YEARS?

Ultimately, it’s all about how quickly and efficiently farmers can get their product to market, so we play a critical role in this process and our R&D investment is a direct reflection of this increasing appetite for speed.

IS THERE AN APPETITE AMONG THE MAJOR MANUFACTURERS FOR THE SWARMFARM EXAMPLE OF FLEETS OF SMALLER ROBOTS?

We’re certainly interested to see how this technology evolves over time, but central to the development and evolution of our product portfolio is the customer, and we’re constantly looking at new ways to find out more about what they want and need. We rely heavily on the input of those who operate and work within the industry, so we’ll continue to work with these experts to ensure we remain at the pointy end of innovation.

THE AUSTRALIAN MARKET IS QUITE SMALL. HOW IS IT PERCEIVED IN NORTH AMERICA?

It’s not really such a small market. Roughly we do over $1 billion of business here and the total corporation does $25 billion, so when you look at the global market, Australia represents 1/25th of the company’s total performance, so it’s quite significant for us.

Within our company we are split geographically into four regions and Australia is part of the APAC region. We represent 30 per cent of that market, so within the geography we’re assigned, we’re the significant market.

HOW IS CNHI EXPECTING TO PERFORM IN AUSTRALIA THIS YEAR?

We’re expecting to do more this year than last year. In our budgeting process here we’ve budgeted an increase in performance versus last year. The way we’re planning to achieve that is through not only market share growth, but also with continuing performance in the growing of the market itself.

HOW DO YOU HOPE TO ACHIEVE THAT WITH COMPETITION SUCH AS JOHN DEERE COMING INTO THE QUADTRACK MARKET AND KUBOTA TAKING ON PUMA?

I fundamentally believe the way you capture market share is not only the product you are offering but all the support processes you have put in place behind that.

We are investing heavily in all of the aftermarket support processes. So the technical service support, the parts business, the footprint of our dealerships and the service points. By investing in this area, it will accelerate the sale of the equipment.

We say that the salesmen or the type of equipment itself sells the first unit to the customer and the second unit is sold based on the performance of the aftermarket support.

CNH ANNOUNCED RECENTLY IT WOULD INCREASE SUPPORT AT DEALER LEVEL. HAS THAT BEEN IMPLEMENTED?

We’re in the process of implementing that. Internally here we’re creating more positions and within the field we’re looking to a 20 per cent increase in the number of people we actually have out in the field working with the dealer supporting them.

THAT’S A HUGE INCREASE IN STAFF. HOW DO YOU BALANCE THE FIGURES ON THAT?

Haha, I want to keep this positive. We’ve had an imbalance in the past and maybe too many people in the back office. So I’ve looked at this and felt we have too many people in the back office and not enough out in the field, so to keep everything in balance the positions we’re creating out in the field supporting the actual sales process will be offset by a reduction in the back office.

My mantra here is that we want to become a more customer-focused organisation. That’s across the whole organisation.

DOES THIS REPRESENT A WHOLE NEW APPROACH TO CNH IN AUSTRALIA?

Absolutely. I’m calling it the evolution rather than the revolution. Trying to constantly improve the processes that we have, the way we work and support the network. Behind all of that is the fact that I think we need to do a better job. We do a good job. We have a very large distribution footprint in this country but I think we have to continually do a better job of serving those guys because that’s where the business really is. It’s out in the rural communities around the country where the farmers are operating. It’s not in the office making reports.