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Two brands is best policy says CNH

PLANT Plant manufacturer says combining Kobelco, Fiat-Kobelco and O&K with New Holland will improve response to customers

PLANT giant CNH is promising customers that it will be 'significantly easier to do business with'by having just two brands, New Holland and Case, where it previously had five.

The radical move to transform the Kobelco, FiatKobelco, New Holland and O&K brands into one, to be called New Holland, first revealed in Construction News last August and launched to the industry last week, will save significant costs for the manufacturer and reduce confusion among customers, the firm believes.

Paul Hoptroft, CNH's UK business director, said the rationalisation, reducing some 200 product lines to 71, would provide a number of benefits.

He said: 'It will bring into sharp focus the size, commitment and ability to meet customer needs. It will increase direct contact with our dealers and customers by 15 to 20 per cent, it will enable us to increase the effectiveness of our marketing by at least 20 per cent because there are no longer four different messages, and we will be able to provide a 30-40 per cent faster response to parts and technical queries because of the improved efficiency in the parts business.

'We currently have a 7 per cent share in the UK and we are looking to raise it to 10 per cent in the next three years.'

Mr Hoptroft said that the manufacturer would be launching a range of minis at the Conexpo show in March and would look to release more machines in the coming months.

'We need smaller telehandlers with a reach of 7 m and 10 m, and 7 to 10-tonne wheeled excavators, which we think could steal business from the traditional area of the backhoe.'

The dealer network welcomed the launch of a single New Holland brand, which gives dealers access to a wider range of equipment than previously - the new range has taken the best of the four brands to provide 71 different models across 12 product families.

Some complained that CNH's previous multibrand policy had left customers bewildered as to the differences between Kobelco and Fiat-Kobelco machines on sale from the same dealers.

The manufacturer has elected to make all the new construction range yellow, forsaking the orange livery in order to avoid association with its former joint venture partner and now rival, Hitachi. It has also decided to feature the Kobelco name prominently on the counterweights of its excavator range underneath the New Holland brand, to ensure continuity with the excavator customers.

Graham Parker, sales director of eastern dealer Ernest Doe, said: 'This clarifies things for the customer.

The New Holland name is good for us, as we are already the largest New Holland backhoe dealer in the UK and we also have a number of customers taking New Holland skid steers.

'But the message to current excavator customers is that the new yellow machine is the same under the bonnet as the previous orange one.We have been very impressed with the FiatKobelco product, which has provided very low warranty calls.'

Ernest Doe will be selling the New Holland range alongside its existing Hyundai excavator and Komatsu mini excavator franchises.

Mr Parker said: 'We are not looking to convert customers from one to the other, they are distinctly different.'

Jonathan Wilson, joint managing director of southern dealer Molson, added: 'We are enthusiastic.

There has been such a lot of confusion.New Holland isn't as well known a name for our customers but we now have a full line of machines to sell under the one brand.

'The Kobelco name is associated with quality and that is being retained.'

IT TAKES TWO: THE LOGIC OF THE MOVE

CNH's decision to reduce the number of brands to two - New Holland and Case - marks a climbdown from the 'multi-platform, multi-brand' policy it promoted to great fanfare when New Holland bought Case Corporation to form CNH in 1998.

But Paolo Monferino, CNH chief executive, denied the wholesale changes have been prompted by any failure in the multi-brand strategy.He said: 'From day one our objective has been a company based on Case and New Holland.This was easy on the agricultural side but not so easy in construction equipment, especially in Europe, where we had five brands and didn't know what the outcome of the joint venture with Hitachi would be.We had to continue with these five brands as we didn't want to lose our regional strengths while we restructured.'

Mr Monferino said that CNH was now a leaner company as a result.He said: 'We have significantly reduced costs by merging the two companies.

'The labour force has been reduced by one third and we have closed 25 factories.

'We have spent $1.3 billion on this to be more competitive and $1.5 billion on new products.We are now a sound and profitable company.'