Two years ago Case Construction saw the collapse of its two largest dealers, CRMS and Saville Tractors. Together these two had covered almost 80 per cent of the brand’s UK territory and accounted for around 40 per cent of its sales.
Luckily, Case (part of CNH, one of the world’s largest plant manufacturer) had a strong brand following. The company had a product range from 1.5-tonne minis to 80-tonne tracked excavators and including backhoe loaders, wheeled excavators, wheeled loaders, telehandlers and a range of recently added articulated dump-trucks.
But construction plant is a highly competitive environment and the likes of Caterpillar, JCB, Komatsu and Volvo would waste no time in filling any gap in the marketplace.
“One of the first things we had to do was ensure ongoing support to our customers which included parts and service, which we did with the help of all our existing dealers,” says Rick Morris, Case Construction’s dealer development manager.
Case could waste no time in building up a new distributor network. “The first thing we did was speak to the sales, service and parts guys at these two dealerships,” says Mr Morris. “We’d worked with some of them for over 20 years and they were our
link to the end-users.”
These depot managers, sales teams and services engineers had the skills. All they needed was to set up a new business. So Case started looking at how to help them get back to work.
A typical example is M&M Plant, the new Case dealer for Devon and Cornwall. Staffed by a former CRMS team, M&M was created with financial backing from a third-party investor after Case Construction helped put together a business plan.
Other new dealers already had a connection with the Case brand. One of these was Bredy, a large agricultural equipment dealer based in Dorset, which has the Case IH franchise.
Bredy helped another former CRMS sales and service team by setting up a new Bredy dealership, separately from the agricultural business.
Other new dealerships came about when established firms approached Case Construction with a business proposition. In Yorkshire, Warwick Ward of Barnsley, a long-established and very successful dealer in used construction equipment, saw an opportunity to move into new equipment.
“They had a good business and they approached us with a proposal which would establish a new dealership in the M62 corridor,” says Mr Morris.
Establishing so many new dealerships in such a short time is complex and time-consuming. Some dealers were familiar with Case products but, as new business start-ups, had to cope with all the bureaucracy of setting up a new company.
Others were established firms which had to very quickly familiarise themselves with the brand and business ethos. Despite the challenges, Case Construction has managed to build up a new network of dealers now numbering almost 20 – nearly twice the number before the collapse of Saville Tractors and CRMS.
“We’re at about 85 per cent coverage at the moment; the jigsaw’s almost complete,” says Mr Morris.
“Despite the problems, we sold the same number of machines in 2006 as we sold the previous year. And last year we increased sales by about 50 per cent. We’ve seen our market share increase by 40 per cent year on year since 2006.”
The strategy now is to work with a larger number of smaller dealers. This reduces the company’s reliance on any individual dealer, and produces a more effective network.
“The new dealerships – plus the broad base of our existing dealer network – all pulled together,” says Mr Morris. “We’ve got a strong team and we have plans to build on that.”