New Tractor Sales Are Declining

[Cahaba Valley Farm]

I believe the equine discount has changed. As I recall, it was 20% when I purchased my L2501 in April, 2022. It seems to have been replaced with a flat $1,000 customer instant rebate for cash buyers plus a flat equine discount of $1,000 for the L series. Equine Offer Landing Page.

Yeah it's gone.

 

[2manyrocks]

With interest rates rising in the USA, I also wonder if the 0 interest financing will continue.

 

[hiddentacocatneddih]

Kubota makes up for 0% in the orange paint and volumes they sell

They probably have a little more cost cutting in their line since they build their own engines and tractors. Companies like deere have to pay yanmar along with other suppliers

 

[drumminj]

Go to the Kubota website and search equine discount. It’s all there on the site with cash discount prices for different classes of equipment. A few thousand dollars; nowhere near 20%.

My bad, you're right. Not sure when it changed, but at least earlier this year it was still live (I know of several folks who leveraged it).

My point still stands - at least earlier this year (and in years prior) one could get a 20% discount if able to pay cash.

 

[nrosario]

My bad, you're right. Not sure when it changed, but at least earlier this year it was still live (I know of several folks who leveraged it).

My point still stands - at least earlier this year (and in years prior) one could get a 20% discount if able to pay cash.

I concur that it was available, but good luck getting a "TRUE 20%" discount.
I tried that with multiple dealers, and the best I got, once you compare prices was 9%.
Local/family-owned dealers are rare in my area, and big franchises are destroying the market.

 

[Cahaba Valley Farm]

Local/family-owned dealers are rare in my area, and big franchises are destroying the market.

That's exactly what is happening with Deere and all their dealer consolidation, destroying competition which is destroying the market. It's really a form of price fixing.

 

[plastikosmd]

Kubota makes up for 0% in the orange paint and volumes they sell

They probably have a little more cost cutting in their line since they build their own engines and tractors. Companies like deere have to pay yanmar along with other suppliers

Business models vary. “In house” does not always equate “cost savings” or the ability to “cut corners” in order to save overhead/turn profit

 

[MinnesotaEric]

Last year purchased a new utv. Only one that was in my range within 100 miles. This year my friend had problem finding one, got used. My tractor dealer has LS, Branson, TYM, Bobcat and maybe others on the lot. He seems to be moving a lot, but not sure when you compare what's on the lot.

Demographically, peak spending by boomers is 2022. Peak economic activity for the next 30 years was also 2022 as worldwide, many boomers didn't have as many children as the usa boomers.

 

[cathy liebchen]

Scotty, dealer cost on a tractor is 23% below MSRP. Kubota's Equestrian discount is 20% off for cash buyers. So if you take a dealer like mine who only knocked off $700 (Manufacturer rebate from Kubota) from the MSRP price then there is the profit for the dealer. In my case he was going to make about $5200 more in profit if I financed versus just $780 in profit if I took the cash discount and that was just the tractor, no extras. So if you do the math he was charging me around 4% a year to finance that tractor for 60 months. I could of gone to any bank or credit Union and financed for that.

I'm surprised that the FTC hasn't cracked down on this industry for doing this as this is in my opinion a form of predatory lending.

We got the big cash discount and didn’t have to pretend to have a horse

 

[Cahaba Valley Farm]

We got the big cash discount and didn’t have to pretend to have a horse

So you got 20% off a new Kubota without using the equine discount?

 

[rScotty]

If they won't sell it cheaper for cash then it is 0%

It really is that simple.

 

[rScotty]

It really is that simple.

And I understand that digging for discounts and bargaining are fun. I enjoyed bargaining when I was a motorcycle dealer...and I enjoyed customers who bargained. I rarely missed a local used machine auction - more fun than a circus.

I've bought land, houses, vehicles new and used, tractors, implements, tools, animals - you name it. and don't think I've ever not bargained.

But really, if we put aside the fun factor from bargaining we are talking about a tractor here. It is a tool. If you have a use for a tool that is going to be used as much as a tractor is, it makes sense to look at other things than price.

For one thing, tractors just aren't that expensive compared to other large investments. And like any tool, after a few years of use what you appreciate is how valuable it is for your life. A few percent one way or the other in the cost is hard to even remember. It just doesn't make a difference. What you notice are the features you got or didn't.
rScotty

 

[ArlyA]

Here is something to ponder concerning sales. If your company can sell 1000 somethings, you can operate your factory for the whole year. If it looks like sales with be 800, you'll need to shut down for 2 months or switch to building some another product. Both of these options are very costly but if we swtich to offering 0% percent financing, you might sell those 200 units and keep the factory running at 100%. We got 0% on our truck back in 2019 because, I'd guess Ford thought truck sales were rather flat and they were reintroducing a dated product. To hedge there bets and keep the factory operating, they offer an incentive for new buyers like us. Kubota might offering zero percent because they can boost there north American sales by 10% and keep this or that factory at 100% and profitable.

 

[Hay Dude]

Here is something to ponder concerning sales. If your company can sell 1000 somethings, you can operate your factory for the whole year. If it looks like sales with be 800, you'll need to shut down for 2 months or switch to building some another product. Both of these options are very costly but if we swtich to offering 0% percent financing, you might sell those 200 units and keep the factory running at 100%. We got 0% on our truck back in 2019 because, I'd guess Ford thought truck sales were rather flat and they were reintroducing a dated product. To hedge there bets and keep the factory operating, they offer an incentive for new buyers like us. Kubota might offering zero percent because they can boost there north American sales by 10% and keep this or that factory at 100% and profitable.

Yeah sounds good, but if you are offering 0% virtually all year for like the last 25 years, something’s afoot.
It means the “0%” financing is baked into the cost of each unit.
What I think Kubota has done is incrementally raised their tractor prices to the point where “0%” game is just an every day part of doing business.
They KNOW people crave 0% financing and making payments with “no interest” because it validates their intelligence that they bought a tractor and made Kubota eat the interest.
It’s a psychology game and they should be congratulated for building a business with it.

I still like Kubota, just like I was a big Ford guy, but once I saw what other manufacturers offered 10+ years ago, it opened my eyes and helped me realize there’s happiness outside of Ford with their “#1 in sales” marketing strategy and from Kubota with their “0% financing” marketing strategy.

 

[CloverKnollFarms]

It’s more likely that the finance charge is built into each unit.

 

[Hay Dude]

It’s more likely that the finance charge is built into each unit.

Exactly
And if that’s their marketing strategy and it works, more power to them.
But I maintain there’s no “free” financing. It‘s paid for in the sales price.

 

[jyoutz]

If 0% is baked into the price, they are still lower priced than tractors with green paint and comparably priced to Massey.

 

[scootr]

True true. Just one more reason to buy what you can afford to pay for be done with the financial end.
I was told never to tell the car salesman you were wanting the best cash price. A better price is available if they think you will finance right up until you pull out the check book

 

[5030]

Whitmer voter. Figures!!!!

Dead wrong, Dixon though I'd preferred that James Craig was on the ballot

 

[Hay Dude]

If 0% is baked into the price, they are still lower priced than tractors with green paint and comparably priced to Massey.

Yeah, they are, but the bigger they get, the more “green paint” and Massey becomes an advantage, too.
As an owner of both, I can tell you a 125-150+ Massey is built more for the rigors of farming than Kubota.