The end of an importation and wholesale distribution deal involving Norwood and the Case IH and New Holland brands will have no effect on NZ farmers, Norwood chief executive Tim Myers says.
Norwood has had a distribution agreement with CNH Industrial, which Myers says effectively dealt with the importation and distribution requirements for both the Case IH and New Holland brands of machinery.
From July 1, 2022 that agreement will no longer exist, with CNH setting up its own NZ-based entity to manage those functions.
He says third party import distribution agreements like the current one have been phased out around the world, with NZ one of, if not the last geographical market to have one.
“CNH and Norwood have been in regular conversation about this at senior level for quite some time.
“So, while it’s come as a bit of a surprise to the industry, for Norwood it’s not a surprise at all.
“It’s something that we’ve been planning for, for some time.
“What it means for Norwood is effectively we become CNH’s dealership partner.
“Norwood dealerships around the country will still represent New Holland (and Case IH) tractors, bailers, combines, foragers etc, in exactly the same way as we have always done.
“There will be absolutely no change.
“From a customer perspective, from a NZ farmer perspective, they shouldn’t notice any difference at all.”
Myers says the new arrangement will have a number of advantages for Norwood, the main one being working capital.
From July next year instead of purchasing Case IH and New Holland products from factories around the world and having large amounts of money tied up in inventory that is not even in the country because of the lead time involved, it will be buying from a NZ-based entity.
“Norwood has always had a massive working capital burden,” Myers says. “That’s become harder and harder to justify.”
He says the way farmers both buy and research products they are interested in purchasing has changed.
“The value of big, in-country inventories, which were the only option for NZ farmers, those days are gone.
“From a strategic perspective, the supply model that Norwood has been able to very successfully manage over the decades has reached its maturity date.
“That happens all the time, in every industry.”
Myers says for months, if not years, work has been going on behind the scenes to reposition Norwood for this eventually and that can now be accelerated.
CNH Industrial Australia managing director – agriculture Brandon Stannett says both companies see the change as an opportunity to drive efficiencies in the supply chain and focus more on their respective roles in that process.
“We appreciate Norwood’s ongoing commitment to Case IH and New Holland dealerships and their customers, which will continue until the transition process is finalised mid next year.
“We will continue to look at new ways to build on the strong relationship with Norwood from a retail footprint perspective.”
He said it was very much “business as usual” for Case IH and New Holland dealerships, and for their customers.
