What’s the Difference? – New Holland vs. Case Construction Equipment

Bryan Furnace (00:00):

Today we're here to talk about New Holland. New Holland probably isn't the first name that comes to mind when you're in the market for construction equipment. And in fact, most of us in the industry think of New Holland as the farmer's brand. But here to talk with us today about that is Tyler Mills from New Holland and he's going to kind of help us sort through this and then talk about some of the new machines New Holland has to offer.

(00:32):

So I'm going to hit you with the big question right up front here. Everyone on the construction side it seems looks at the New Holland brand and they're like, "Oh, that's the farmer brand. That's not construction equipment." But for a lot of people who aren't familiar, you guys have a very tight relationship with CASE. Can you kind of talk about that?

Tyler Mills (00:51):

Yeah, sure. And first of all, I think the fact that people associate us with the farmer base is fundamentally a good thing. It's an area where New Holland Construction plays very strong as a legacy brand. Our original skid-steer loaders and backhoes were developed under the agriculture umbrella and marketed through our agriculture dealers and we have a real strong tie to the ag community. That's something we're proud of and something we definitely try and promote, grow, preserve as part of our DNA. The other side of it is really we are a construction brand. Maybe a less commercial construction brand and one very much more targeted toward landscaping, a lot of municipalities, and think maybe more independent owner operator smaller types of businesses like that and our portfolio is very much geared toward that. So we pressing very hard into that part of the market right now in addition to preserving that farm legacy that you were talking about before.

Bryan Furnace (01:40):

And that's always been my experience with the New Holland brand is it's all of CASE's kind of small equipment that has really been rebadged and maybe tweaked in a few areas that it works a little more for the landscape and kind of agriculture market, but you guys just don't get into the big toys. You leave that for CASE from what I understand.

Tyler Mills (01:59):

Yeah. And it fits our customer demographic I think a little better. So what we look at is rather than just having two competing overlapping brands, which can be really challenging in the market, what we've really tried to do is focus really on who are our customers, who are the customers we're really looking to go after? And New Holland has a very big opportunity different from the traditional CASE Construction customer who would be more commercial operator, heavy construction type of a customer base. New Holland has an equally strong presence in that lighter construction area.

(02:30):

And then the other side is being a part of a larger umbrella of product, sharing a lot of DNA, like you said, with CASE, New Holland actually brings a lot of its legacy product development types of things into the market as well. So we've differentiated completely in some products like some of our backhoes or completely different machines than the CASE units would be, even to some of the DNA. Like our vertical lift linkage on our skid-steer loaders is very much a New Holland DNA thing and we also show the CASE DNA in a radio lift type of a lift linkage and we've been able to kind of blend them, pick and choose, and then we really optimize for our intended customer audience and base and it allows us to really branch out maybe more than one brand would be capable of doing exclusively on its own and capitalize on a little bigger chunk of the market, which is we think an advantage.

Bryan Furnace (03:14):

So just out of curiosity, when you say you tweak some things to really hone in on your market, are there a couple examples of something that you'll find in maybe a New Holland machine that you're not going to find in its CASE counterpart?

Tyler Mills (03:25):

Yeah. I would say maybe even less about the specific features and even about the product portfolio itself. So at CONEXPO here in March of this year, we launched our medium frame track loader, the C330, which was really targeted at the landscaping audience. So it's light, it's narrow, it's designed to be trailered and maneuvered around and do some of these kinds of things. And that's something that we're launching first as a New Holland product and actually not under both brands since the need was really built and defined under New Holland. So it's really more, I'll say, use case based. Some of the other things that we see is a lot of, going back to some of our traditional farming owner operator customers who are maybe a little more likely to be hands-on in terms of repairs and uptime maintenance, some of those kinds of things.

(04:07):

You'll see often a propensity toward mechanical controls and like skid steers, mechanical hand and foot machines are still a big piece of our business. Backhoes, we still do a lot of mechanical controls in our backhoes. We tend to sell a lot into the less than 95 horsepower category because we don't have the depth considerations around selective catalytic reduction. So some of those kinds of things are really less about us trying to push stuff into the market and more about us trying to meet our customer where they're at and what their needs and uses really are and giving them a machine that fits that need specifically.

Bryan Furnace (04:43):

I do like that approach and that's something you don't often hear from OEMs. Obviously you guys are going for more market share, but it's not only about the market share push. It's, "No, we're going to step back and we're going to continue to take care of the customer base that we've cultivated." Too many OEMs in my opinion lose sight of that customer base and they get so focused on what's out there that they need to go after. So that's a refreshing perspective to hear.

Tyler Mills (05:10):

And our CEO has made it very clear, we've really started implementing a customer-centric culture across CNH, not just the New Holland brand, but it's one of the things that we find it's an easy way for us to engage the market and meet customers where they're at. If you have a need, address the need first. And then we start to look further out. At risk of not being innovative, then we also need to start looking out a little bit farther. Where are some of these technologies going to come in? And that's where really, in any of the brands, but what I see especially for New Holland CE is, we can leverage technologies and things across all of our CNH brands. So I would say not even just CASE. We see a lot of construction specific innovations coming from CASE that we can use with New Holland, but we also see a lot that we bring over from the precision agriculture side into New Holland as well in terms of how we manage fleets and operator behaviors as we go along and that kind of thing.

(05:57):

There's obviously a big shift toward electrification across everything. So even if our current operators are not necessarily fully embracing that or even needing that technology yet, history shows that here before too long they will probably need it. And so we look to see what's kind of a ramp where we can bring it on? How can we make it comfortable to adopt those technologies? But first and foremost, are these technologies really relevant to our customer base and our segments that we're really pushing into with this brand? And try and keep that part forefront for sure.

Bryan Furnace (06:26):

Well you kind of lead me into my next question there talking about having CASE as kind of that big brother. That's, in my mind, got a lot of advantages and one of those is the ability to draw on the machines that they're working on and work those into your inventory. Can you guys talk about some of the new machines you introduced at CONEXPO?

Tyler Mills (08:00):

Yeah. So we launched three at CONEXPO specifically, really four. One had been launched a little bit earlier than that, but we launched our F50C forklift, which is more an agriculturally focused machine. So a 5,000 pound category machine specifically intended for fruit orchard management, picking up harvest of fruit products in the high cycle times and things involved with that. So a very specifically targeted machine. The C330 we talked a little bit about here a second ago. Having a machine that's a lot easier to trailer, a lot easier to maneuver in in more dense metro situations or sensitive weight areas. So the C330 is a big one, is going to be rolling out here through the fourth quarter. We started our move into electrification with the E15 excavator, E15X, which is our first machine to electrify for New Holland.

(08:46):

And also one that we were able to capitalize on really obviously with CASE with our construction business, but around the big investment we made in the Sampierana acquisition that we did last year. So that was a product that came almost ready to go for CNH Industrial, both brands actually. So launched that at CONEXPO as well and then the other one is the C314 mini track loader, which again is if we look at packaging up solutions for landscape contractors, light contractors, that kind of utility work fits very nicely with the small excavators and the trailer bowl landscape focused customer and that kind of thing. So packaging all of those things that really starts to define the New Holland portfolio as that. Obviously agriculture, like we talked about, but also really a big push and focus into expanding into what we see as an opportunity area with the landscape contractors and municipalities.

Bryan Furnace (09:38):

And I was going to say, again kind of drawing on that big brother of CASE, you guys don't just operate at the small end of the spectrum because you guys now have the New Holland equivalent to that track loader, the 6,200 lift power and capacity. What's the model number on the New Holland side?

Tyler Mills (09:54):

Yeah. The C362, and actually, with that being such a large machine, as we were bringing that to market, obviously really much developed in conjunction with the CASE Minotaur project really is how that came to be. We saw a big emerging need for that heavy capacity track loader. And what we've actually found is that the agriculture market, the agriculture customer base, really resounds with that product just because of its capability on farm. And so we see a large majority of our sales actually going predominantly to the farm.

Bryan Furnace (10:25):

Interesting.

Tyler Mills (10:26):

Even in addition to some of the other construction capabilities that it's got, which kind of surprised us. So we're happy about that and obviously it still kind of fits that sweet spot of ag and landscape that we've got and it's been a real strong product for us. It's something I think everybody likes to see at a show. Everybody's shocked when they walk up next to it because it's a big mamma jamma, but it's a cool product and one we're really proud of and it has really been part of that joint synergy that you're talking about as being part of the C segment in CNH Industrial.

Bryan Furnace (10:55):

It is interesting. There's multiple thoughts I had while you're going through that. The first one is it's so interesting to watch OEMs roll out products like this and it's got this kind of clear intended purpose that everyone sees it being used for. And then it's really interesting to see how the customer base actually adopts that machine or the technology or whatever that thing is and actually makes it work for what they need it to be. And what you were just saying is a prime example. I don't know that anyone rolled that machine out thinking, "This is going to be the agriculture machine." And yet it's got a tremendous amount of capability, but you're still, relatively speaking, in a pretty small footprint. It's still a skid-steer. It's not some lengthy machine like a backhoe or anything. So I could see where the agricultural market would just eat that up.

Tyler Mills (11:38):

Yeah. And like you say, it's fun and it's really, again, where I've tasked my team, our entire organization really, of staying connected to the customer so we can understand that because no one really expected that machine to take off as well as it did in the ag segment category. And let's be real, at the end of the day, the funnest thing of what we get to do is go out and operate machines in the dirt. And what we find out, our customers across the board, it's less about specific features, options, specifications maybe and more about fundamentally will it pick up the rock and put it down or not. And we have some real basic criteria that we can meet with our products and if we can't, people tend to adopt it and modify it and make it work in a lot of different environments.

(12:17):

So it's fun. We have a really innovative customer base I think in the New Holland Construction customer base between farmers and contractors and stuff like that where we get to see our stuff used in all kinds of different applications. It makes it really fun.

Bryan Furnace (12:30):

I will say, you guys, in my mind, have a little bit of an advantage kind of being the landscaper and ag side of it because, and I'm speaking as an operator. So I'm judging myself as well, but we tend to be very needy. We want all the cool buttons and all the fanciness in the cab. We're going to throw a fit when it's not exactly where we would've put that button. But it strikes me that most of your landscapers and ag guys, just like you said, they want it to pick up a rock and put it down. And so we don't need all the fanciness and you probably don't have to hear all the complaints that you hear from the construction side.

Tyler Mills (13:01):

Yeah. No. You definitely get that and you see it. It's a really practical approach and I think a lot of the people in those industries are very pragmatic in their approach. People are just trying to accomplish a task at the end of the day and we need a machine that's going to help us get that task accomplished and that's kind what we're trying to. As we move along, especially with New Holland, where we've divided off CASE certainly, building their product portfolio to match that commercial construction type of a business, which tends to be maybe a little more feature driven, a little more productivity, cycle time type of driven business, very differently than ours, which is maybe a little more pragmatic and direct because sometimes it's just you're a one man operator.

Bryan Furnace (13:38):

Sure.

Tyler Mills (13:39):

One person on the crew doing the whole gamut of things. And so you got to be able to interface with every piece of your toolbox. And so that pragmatic approach I think is kind of that sweet spot that we've started to find with the brand that we can start to build out a little bit more as time goes on. And really what we found is almost no brand or market overlap between CASE or New Holland.

Bryan Furnace (13:59):

Interesting.

Tyler Mills (13:59):

So it's a real harmonious relationship as a result of that.

Bryan Furnace (14:03):

Yeah. Very interesting. Well, Tyler, my final question is, what can we expect from the New Holland brand over 2024 and the upcoming years?

Tyler Mills (14:12):

We're working on a lot of things, certainly on the product side and we're going to see a lot more development toward that landscaping application. So expanding the portfolio in some of the product categories and lines. There's more electrification coming, certainly connected vehicle telematics types of things. From a portfolio standpoint, really doing more of this user base product portfolio development. We're looking at constantly evaluating other kinds of products we can add in or things like that that would maybe even be the same or different than what CASE has got, right, because we're building it on a customer based platform.

(14:45):

So definitely a lot more of that coming. And then on the other side, really we're seeing big advantages too, just the ease and accessibility of the brand. So how a customer searches for New Holland Construction, engages with the brand, shops products, buys products, how the dealer manages that. Just a much more approachable way to do it so you can do it from your phone in your truck and you can buy and access the brand that way. Just make that flow happen a lot easier, which is in that next productivity innovation that we see, kind of that pragmatic approach to how people want to buy things. If you can buy it that way on Amazon, you probably want to be able to buy it that way this way too. Developing that out over the next year is a big priority for us also.

Bryan Furnace (15:24):

I will say, that's kind of where I see this industry slowly going is the way of, in the field, I just need to be able to jump on my phone and go grab whatever the parts are that I need or I can absolutely see this going the way of even buying machines via some sort of an app versus going into my dealership and talking to a salesperson and all of that. So I'm very curious to see what you guys do as OEMs over the next five to 10 years.

Tyler Mills (15:48):

Yeah. Lots of work to be done, but I think you're exactly right.

Bryan Furnace (15:51):

Well thank you again for Tyler taking the time to come on the show and chat with us about who New Holland is and what they have to offer. And if you're in the market for a new piece of construction equipment, don't write off the New Holland brand. So with that being said, as always, I hope this has been helpful. I hope it helps your business. We'll catch you on the next episode of The Dirt.