Richard Johnson, owner of J5 Tractors with 4 locations in Texas, has been a Mahindra dealer since 1999 and chair of Mahindra North America’s Dealer Advisory Council since 2015. As chair, he bridged the gap between dealers and management during a time of significant transition. Viren Popli took over as president in October, replacing Mani Iyer, who held the position since 2009.
Johnson offers his dealer-principal’s viewpoint of running his business under Iyer’s leadership: “What I always admired about Mani is that there was nothing out of the question for him. He would never not think about trying to make something work if he thought it was best for Mahindra and the dealers.”
Johnson says this about the future under Popli’s leadership: “I think and I hope that Viren will concentrate on continuing the success and putting the company back to being retail focused. I hope he builds on the success that Mani has provided and moves forward with updating and providing more innovative processes and procedures. Then, I hope that he focuses a lot of his energy and time on making sure we continue to improve the dealer network.”
Read on for more from Johnson about recent happenings at Mahindra and what he sees ahead.
Rural Lifestyle Dealer: What do you see as your role and what have the last few years been like?
Richard Johnson: I see my role as being the driver to get to a mutual point between the dealers and the manufacturers — trying to make it as good as it can be for the dealers and as good as it can be for the manufacturers. When I do something, I'm going do it to the best of my ability, so I try to take as much time and answers all the questions and all the dealer emails and phone calls.
This dealer council is a little different than the ones I've been on before. With the other manufacturers, the dealer council was more like a puppet, just set up to say they had a dealer council. They held their meetings and they went through all the motions, but I just didn't ever feel like that the dealer council made much difference in what the manufacturers did moving forward. That's totally different at Mahindra as far as what I've seen over the last 3 years.
The senior management, Mani Iyer and everybody involved really took to heart what the dealer council has said and tried, to the best of their ability, adapt the company and processes and procedures to help the dealers.
Ratings for Mahindra
RLD: What are your thoughts about other dealers’ perceptions of Mahindra, especially as reflected in the Equipment Dealers Assn.’s annual Dealer-Manufacturer Relations Survey?
Johnson: I know that Mahindra has gotten some bad reviews, but most of it, in my opinion, is because of the fast growth over the last 2-3 years. They’ve had a hard time keeping up with their processes and procedures and even personnel to meet dealer demands. So, they fell short on some things, such as response or reaction times and things like that to get the dealers’ needs fulfilled.
I don't know exactly how people ranked them, so if a dealer gave them a zero that just depended on what happened with that particular dealer. But, was there reason for concerns or for being unhappy about certain things from a dealer’s standpoint? Yes, there was. I don’t know how extreme it was compared to other manufacturers I deal, but they're not all perfect. I can say that the dealers were justified in having some animosity toward what was going on regarding the delay in some of the processes and procedures not being exactly like they needed to be.
RLD: Can you comment on one program in particular, the automatic replenishment program?
Johnson: The program was rolled out because we had been ordering in bulk at the National Dealer Meeting. So, in October, you were basically trying to order all the tractors you thought you were going to need for the next year. Most of the dealers wanted a different type of program, where orders were based more on retail sales than they were on just guessing what was going to happen 9 months down the road.
Say, for example, I sold 50 of a certain model in year, I would order based on those sales. Who’s to say that 60 days or 90 days from that time, Kubota, John Deere or even Mahindra came up with a different model with a different program that made the model I was selling not be as attractive as it was the year prior. You'd be sitting there with those tractors you ordered and you were pretty much stuck with them.
Or, in certain areas, you might have a slow down because of the economy or the weather or some other factor. So, for some dealers, inventory built up because of having to order just once a year.
Mahindra came up with this program so when you sold a model, it was automatically reordered. But as of right now, the dealer has the option to cancel that order period based on his stocking levels, which I've never seen any other manufacturer let that happen on an auto replenishment order. Or, you have 7 days to change to a model that you feel is more attractive at that point in time. It’s the best program they've come out with, in my opinion, over the last couple of years to help the dealer get their inventory right.
Now, when they came out with it, we talked as a Dealer Council and with Mani that it was going to take 9 months to a year to correct the inventory that was out in the field. I think some dealers wanted it to happen faster than that. They were nervous about the inventory they had in stock and they didn't want to have to get any more inventory. But I didn't understand that because Mahindra was allowing them to cancel any orders that made sense to cancel. Or, if you wanted to change that tractor to a different model, they allowed 7 days to be able to get that done. It was an easy process. Once you sell a tractor, when you register it, everything is done. You don't have to worry about doing the order or any of that. Now, I keep up with the program because if I want to cancel an order or change an order, we do so.
I know some of the dealers, even some on the Dealer Council, were apprehensive about this program. But if you was to talk to those dealers today, they'll tell you now that this program is a very good program.
RLD: Do you think that dealer concerns about processes influenced their opinion of the automatic replenishment program?
Johnson: I think that some dealers were already upset about too many other things to receive this program like it should have been received. If everything had have been rosy on the processes and procedures and if inventory levels weren’t as strong in some areas as they were, the perceptions might have been different.
There is still some adaptation that we need to do to the program. There needs to be, in my opinion, some seasonal components added, especially for the Northeast and Canada. Those dealers don't need hardly any inventory during the winter because the snow is 6-, 7- or 8-foot deep. You can't even see the tractors, so they have to try to figure out how to put them inside.
We're going to bring that up at the Dealer Advisory Council meeting in January to figure out how we can even make the program even better for those dealers.
Growth of J5 Tractors
RLD: You have a long history with Mahindra and with working with Mani Iyer as its president. Can you comment on the changes at your own dealership in that timeframe?
Johnson: I started with one location in Normangee, Texas, 1999. At that time, I carried Mahindra as well as Massey Ferguson and Zetor. Mani asked me to expand, but my kids were in high school at that time and I just wanted to get through that part of my life before I did any expansion. So when the youngest son graduated, we opened another location in 2011 in Navasota. Then, in 2013, we opened a location in Conroe, taking over the area of a dealership that went out of business. In 2016, we opened another location in Buna.
I’ve known Mani since he took over as president. We were the largest Zetor dealers in the nation at that time. Mahindra was third for us, as far as tractor manufacturers were concerned. Mahindra had a very, very small market share at that time, but I decided I wanted to be good at one thing and decided to pick one manufacturer to go with. Because of the way that Mani started doing things, I decided to go with Mahindra only in 2009.
From a company that had very few dealers and very little market share, Mani turned Mahindra into a company that is No. 3 in North America for 80 horsepower tractors and below, with a really, really good set of dealers. And, quite a few dealers have really good market share.
And, Mahindra is competing against John Deere, Kubota, New Holland and Case — very good manufacturers. It took a special person to be able to achieve that.
Comments about Leadership of Mani Iyer
RLD: What are your thoughts about Mani as a leader?
Johnson: He built really good relationships with most dealers and he always tried to look out for the dealers with the decisions that he made. We had very few models to sell when Mani took over and didn't have very good financing, either retail or wholesale. Now, we have a good lineup of models to sell as well as Mahindra finance, wholesale and retail. He brought lot of things to the table in the 10 years he was there.
Mani worked solely for Mahindra and the dealers every hour and every minute over the last 10 years. What I always admired about Mani is that there was nothing out of the question for him. He would never not think about trying to make something work if he thought it was best for Mahindra and the dealers.
For us to be able to keep taking market share and growing, we can’t do it in the conventional ways that it's been done before. We have to do it differently. Mani did take risks that for the most part paid off. We are where we are today because he wasn't afraid to take risks, and he wasn't afraid to think out of the box and do things differently.
I've tried to copy the same philosophy with my company. We've done things differently and we sure don’t worry about what the big guys are doing. If we thought it was best for us to do it this way, that's the way we do it, so that's what I always admired about him. That there wasn’t any idea too big or an idea that wouldn't work. He just kept thinking about how to make it work.
And, any dealer could contact Mani. I would venture to say that he responded back to every phone call, every email and every text within 4-5 hours. I don't know any CEO that will do that. He responded no matter what the question or what the problem was. Now, he may not answer the question or the problem directly, but he got someone from his team to get on it. We will miss Mani and his leadership as he was a different CEO!
Comments to Fellow Dealers
RLD: What would you like to share with your fellow dealers during this time of transition in leadership?
Johnson: We have reached out to dealers and we will do whatever we can to make this transition as easy and as smooth as possible. Then, we're going to have to sit back just a little here and give Viren Popli a chance to put his processes and procedures in place and get his feet on the ground. Then, hopefully, we'll move forward. In speaking with Viren, I have confidence in him. And, in speaking with Rajesh (Jejurikar, president of the farm equipment sector at Mahindra & Mahindra), I know they are committed to taking it from where Mani has left off and moving it forward.
Comments about New Leadership, Future Growth
RLD: What are you hoping for from Viren Popli as Mahindra North America’s new president?
Johnson: I think and I hope that Viren will concentrate on putting the company back to being retail focused. I hope he builds on the success that Mani has provided. Then, I hope that he moves forward and develops more innovative processes and procedures and addresses dealers’ concerns about current inventories. And, I also hope he continues the focus on the health of the dealer network, such as putting processes in place for what it takes to be a Mahindra dealer and making sure dealers do their part in keeping their people trained.
We want to look good as Mahindra as a whole and give the customer the best experience that they can have, whether they are dealing with Mahindra, the dealer or the dealer’s employees. Everybody needs to work together to make sure that when someone has an interaction with Mahindra, they come away thinking, "I don't know that I could have done much better.”
RLD: What developments would help you continue to grow?
Johnson: I'm optimistic about Mahindra because of the technology that hopefully will be integrated into our tractors — some of the same technology that is in use in larger tractors, such as telematics.
For me, I wouldn't be any other tractor dealer. John Deere and Kubota are good manufacturers, but they're controlling on what you can and can't do. Right now, Mahindra is not that way. There are bylaws we have to follow, but they don’t tell you what you can do or not do every step of the way. They're flexible and easy to do business with.
Mahindra is not perfect — I don't know any company that is perfect. But as a whole, they're a good company to do business with and I think it's only going get better, especially, when their processes and procedures catch up with their growth. Growth of 20-30% every month is unheard of. When I took on the line there were only about 35 dealers. When Mani took over, there were only about 200. Now, there are more than 500.
Some of my counties in Texas, we have 50% market share for tractors 80 horsepower and below. In the next 10 years, I can see Mahindra gaining market share by being willing to continue to work with and listen to the DAC and their respective dealers and continue to lead from the front in 80 PTO horsepower and below.