BRISTOL-based Molson Holdings has signed a five-year dealer agreement with manufacturer CNH for Kobelco and Fiat-Kobelco machines for Wales and England south of Yorkshire, excluding East Anglia.
The agreement is one of the first signed by the manufacturer as part of a rationalisation programme that is seeing around a third of its dealers dropped around the world.
The manufacturer would not comment on reports that the moves were a first step towards brand rationalisation but it has made it clear it intends to have fewer, larger dealerships.
CNH UK manager Paul Hoptroft said: 'We have made this agreement because we believe Molson is an aggressive young sales company with a real future with us.'
Molson believes the length of the deal and its expansion of territories indicates the confidence CNH has in its ongoing business, which has undergone restructuring in the past year, including the closing of its used equipment refurbishing operation and its London depot at Purfleet.
Molson expects to post turnover of £39 million this year, down from £52 million last year.This reflects the change of priorities and will make them more profitable, according to director Robin Powell.
He said: 'We have fewer salesmen and we have dropped the refurbishment arm, which means we will lose less money on poor trade-ins.'
Mr Powell said he believed the focus for dealers in the UK would move away from traded-in machines.He added:
'We will be more like a car dealership in future - manufacturers are simply not doing trade-ins like they used to.'
The company expects to sell 500-550 new CNH machines this year, alongside 650 used machines, including around 200 CE-marked grey imports from Japan.This blend, according to Mr Powell, gives customers an unrivalled choice of machines.
'Nowhere else in the country has got the breadth of machines we've got in the yard.You can come and get a 13tonner off the shelf and few other dealers can say that.'
Mr Powell added that the closure of the Purfleet depot would improve service, rather than reduce it.
He said: 'What the customer wants is service. Having elaborate premises doesn't solve the customer's problem.
When he says: 'Where is the depot?', what he means is 'How soon can you get here?'
'Customers will wait for four to five hours for service and will consider a next day response as failure. In reality, next day is more realistic, but two days' response is unacceptable.'