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John Deere offers performance guarantees in Europe

Maintenance agreements help owners in Europe stabilize machinery costs

The sign (written in German) above John Deere’s exhibit at Agritechnica in Germany in November reads, “More affordable, guaranteed.”

What do you think the average field size is in Western Europe,” Thomas Höglmeier, segment manager for John Deere, asked the group of North American journalists clustered around him. A moment later he answered his own question: “Two hectares (about five acres) is the average field size,” he said.

Höglmeier was leading a media tour through Deere’s display in one of the giant buildings that housed part of the 2017 Agritechnica machinery show. Aside from the fact those small fields mean farm machines spend a lot of time mingling with regular traffic on narrow European roads, it’s one of the features of the generally smaller farm sizes that continue to dominate agriculture on that continent.

Thomas Höglmeier explains Deere’s new maintenance and operating cost guarantee that is aimed primarily at custom operators in Europe. photo: Scott Garvey

Maintaining small farms means keeping the long-established nature of rural populations that, among other things, support small villages and contribute to the long-standing social structure.

“The European Government isn’t encouraging a change of scale as much as before,” added Deere’s Georg Lanschied. “Smaller farmers then outsource some tasks because they can afford all the equipment.”

The result of all this is the agricultural contracting business (custom operators as we’d call them here) is booming, and those contractors account for 35 to 40 per cent — depending on the specific country — of all of Deere’s equipment sales in Western Europe. So the green brand is making a strong pitch for their business.

Deere’s latest marketing effort is aimed at allowing machinery owners to accurately predict yearly equipment costs. Brand marketers think that will appeal primarily to contractors who put a lot of hours on their machines. As part of this new program the company is offering, Deere is willing to guarantee buyers that their 6R, 7R and 8R tractors will achieve a target level of fuel consumption, or Deere will actually cut a cheque to owners for the cost of the difference. And, if the operator achieves even better fuel efficiency than the target level, owners will receive an efficiency bonus from Deere equal to twice the cost of the fuel saved.

“If we don’t meet it, we pay you back,” explained Höglmeier. “We measure it with our telematics. Fuel represents 50 per cent of contractors’ costs.”

This German sign announces the fuel-cost guarantee program, promising owners a money-back guarantee. photo: Scott Garvey

Although fuel is a major expense, keeping machines rolling is the biggest concern for both farmers and contractors, according to Deere’s research.

“Arable farmers aren’t so much focused on fuel,” Höglmeier said. “They focus on uptime.”

To deal with that concern, Deere is offering a second guarantee program that deals with uptime. To include tractors in it, buyers will need to opt for a full maintenance contract. As part of it mechanics will come to the farm to make periodic inspections to keep machines going.

“Dealers are doing in-field visits optimizing our machines,” added Höglmeier.

If a tractor does go down, the dealer will have to provide owners with a back-up replacement to keep farm operations going.

Deere claims its engineers have done so much testing on individual components, that they can predict the typical lifecycle of many different parts. Customers who buy the service agreement will see local dealership mechanics coming out to replace parts based on that schedule, even if they’re still working.

“We can predict part life and replace them just before they fail,” said Lanschied. “We’ve tested this a lot so we can be sure we’re not replacing parts for no reason.”

There’s no official word yet on whether Deere will bring this concept to North America. But the U.S. farm show season is just about to start, and that is where a major announcement like that would be made. So stay tuned.

Product manager for combines in Europe, Carston Heftig, says Deere’s T560 5-walker combine is the brand’s bestseller with European contractors. photo: Scott Garvey

About the author


Scott Garvey

Scott Garvey is a freelance writer and video producer. He is also the former machinery editor at Grainews.



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