McCormick sales director calls for realistic tractor pricing
06/02/07

The tractor industry should “get real” with the prices it advertises for its products and use discounts more intelligently than as a simple “give-away”, says a leading industry figure.

McCormick sales director Jeremy Lamb says the artificial prices quoted in price lists, advertisements and press articles are inflated by as much as 30% to allow big ‘discounts’ to be given and bear no relation to transaction prices.

“It may give people a nice feeling when they think they’re getting a big discount but it’s just an illusion,” says Mr Lamb. “It’s a nonsense that the industry quotes so-called retail prices that bear no relation to the final transaction price, just because we’ve got into the habit of being ‘generous’ by giving away huge discounts.”

Apart from being misleading, inflated list prices are also damaging, he insists. The figures look so daunting that they can deter potential customers from even thinking of buying a new tractor.

“Yet today’s tractors represent extraordinary value-for-money, because specifications and features have improved but transaction prices have not kept pace,” he explains. “A new McCormick represents remarkable value. But it’s still a major investment and one that deserves to be taken seriously with an intelligent approach to pricing and justifiable discounts.”

McCormick is getting the ball rolling by adjusting its list prices downwards over the next two years, so that they end up much closer to the transaction price farmers and contractors will pay. Dealer margins will not be affected nor will the company’s tractors become cheaper in real terms.

The list price for McCormick’s best-selling four-cylinder tractor, the 102hp CX105 four-wheel drive, changes from £35,994 to £32,153 this year and for the best-selling six-cylinder model, the 152hp MTX150, from £51,114 to £44,274. The 173hp XTX185 E-plus model, previously listed at £61,212 now carries a £56,878 price ticket.

“This first step in our pricing adjustment gives our prices greater realism and transparency and I believe farmers reviewing their budgets and replacement policies will welcome that,” says Mr Lamb. “Farmers planning to buy a new tractor will have a clearer idea of its cost from the outset instead of waiting for a formal quotation and playing ‘hunt the discount’ to get a true picture.”

Urging other manufacturers to follow McCormick’s lead on realistic pricing, he points out that McCormick has been a significant influence on the tractor market in the six years since it opened for business on 1st January 2001

The company has built a nationwide network of retail dealers with generous territories to provide a reliable source of sales, parts and service coverage, the product range has grown from just two lines with six models to nine lines with 30 base models, and it has helped maintain keen competition in the market following the merger of two leading manufacturers.

New additions to the McCormick XTX ‘premium’ tractor range at 145/156hp and 167/171hp, plus upgrades to other models, are planned for this year.

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