Tractor Pricing Is Criticised By Mccormick Sales Director 06/02/2007

A leading figure in the tractor industry has commented on the unrealistic pricing strategies in this particular industry. The industry has also been criticised for not using discounts more effectively. According to Jeremy Lamb the sales director from McCormick the prices that are advertised and are on price lists can be inflated by as much as 30% to allow big discounts that don’t actually affect the final price for the company.


“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.”



The prices can be deceptive to the customer which means that they can be damaging for the business. If a price is too high then it will put people off even considering the option 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 wants to adjusting and therefore decreasing the prices of their products over the next two years. They hope that they will end up being much closer to a price that farmers and contractors will be more willing to pay. Prices for the best-selling four-cylinder tractor supplied by McCormick’s (the 102hp CX105 four whell drive) will decrease from £35,994 to £32,153 this coming year. The best selling six-cylinder model, the 152hp MTX150 is expected to decrease from £51,114 to £44,274.



“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.”



McCormick’s has had a substantial influence on the pricing strategies in the tractor market in the six years that it has been established. The company has made a good reputation for itself and has therefore built up a good relationship with its customers and retail dealers. The product range had expanded dramatically making the company a popular choice in the industry due to the variety it offers. It has gone from two lines with six models to nine lines with 30 base models.



There are plans for new models for the tractor range to be launched and other upgrade to existing models.

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