It also has a huge number of assets to
finance, all of which it does through its leasing arm CNH
Capital.
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According to retail finance manager
for CNH Capital in the UK and Ireland, Bruce Atkinson, his company
has first right of refusal from customers looking to underwrite CNH
assets via the dealerships.
Exactly how much business it does,
however, is uncertain as Atkinson does not disclose any
figures.
Meanwhile, recession aside, to make
matters even more challenging for the company, the plant giant is
fighting its sales battle on two very different fronts – the
volatile and seasonal agricultural sector as well as the globally
depressed construction industry.
Atkinson, meanwhile, has to contend
with the peculiarities of the agriculture sector.
In contrast to other sectors such as
haulage, where captives often do most business through operating
leases, the majority of CNH’s finance business is done through hire
purchase (HP) products.
Atkinson commented that the
family-owned nature of many farming businesses diminishes the
appetite for keeping assets off the balance sheet that drives a lot
of operating lease business in the corporate sector.
The agricultural sector’s notoriously
seasonal nature also has a big effect on the design of HP and lease
products, which are assessed on a quarterly basis by CNH Capital
and its manufacturer parent, for each of the company’s four brands
(NH Agriculture, NH Construction, Case Agriculture and Case
Construction).
Atkinson used the example of the
tractor market, which sees biggest sales in spring. He explained
that, in the event of high levels of stock being left in autumn,
CNH might design a more aggressive tractor finance product for the
winter season, involving – for example – a longer period of 0
percent interest.
Another peculiarity is that none of
the dealerships are owned by CNH – they are all independently
owned.
Atkinson still has his work cut out
for him managing the 150 regional dealerships at which CNH’s assets
are sold.
He also manages the provision of
stocking finance to these dealerships.
The dealers as a whole are supported
by nine area sales managers, each of which will oversee finance
sales across around 20 outlets.
Finance is generally offered at point
of sale, with customer interest (particularly and predictably for
low rate financing at present), referred on either to regional
managers or to HQ.
Fred Crawley
