Summit News

A tale of adultery and green tractors

CHICAGO (Reuters) - Never try to sell a Chinese farmer a green tractor or roll out a flashy new design with a rounded hood in India.

These are just some of the lessons that Agco Corp AGCO.N Chief Executive Martin Richenhagen has picked up in his 15 years selling farm equipment around the world.

The Duluth, Georgia-based company has an as-yet small presence in China, but Richenhagen believes the world's No. 3 maker of tractors, combines and other farm equipment has one big advantage versus world No. 1 Deere & Co DE.N when it comes to cracking open that market. Around the world, Deere's wide range of farm machines stand out for their bright green hoods.

“We have a competitive advantage compared to some of our colleagues,” Richenhagen said at the Reuters Manufacturing and Transportation Summit in Chicago. “Green is a very bad color in China.”

Specifically, green is associated with adultery -- wearing a green hat is a way a man could signal that his wife had cheated on him.

“Red is the color of luck. And therefore we will go there with Massey-Ferguson,” which uses red hoods on its tractors, said Richenhagen, who comes from Germany.

It is not just Chinese farmers who are picky about the color of their tractors, as Agco discovered when it phased out the Allis-Chalmers brand, and with it the orange tractors that had been a fixture of the U.S. grain belt since 1914.

“I did get hundreds of emails and needed some bodyguards for a while,” joked Richenhagen. Even his son -- who shares his name -- still receives the occasional complaint on his Facebook page from farmers who want to replace their equipment without abandoning the orange look.

These kinds of regional quirks can influence Agco’s sales in countless unexpected ways, Richenhagen said. In India, the company recently replaced an aging model of tractor that featured a square hood with a new model with a stylish curved hood. The new model failed to sell.

Why? Most tractors in that country run 24 hours a day, but spend only about a third of the time doing actual farm work. Away from the fields, they are pressed into service as passenger vehicles.

“A square hood is a very good feature to have on an Indian tractor, because it can sit more people than a round hood,” Richenhagen said.

Reporting by Scott Malone, editing by Matthew Lewis