New Tractor Sales Are Declining

[5030]

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

Been wondering what the 'equine discount' is, as we have no horses (hole in the barn you pour money into) either. Besides, I'm allergic to horse hair....

 

[scootr]

My Kubota dealer told me I'd get a $2k discount if I said I was a farmer.
When it was all said and done the dealer pricing turned my attention back towards the used market.
I found exactly what i needed slightly used for 10s of thousands less. Best of all I was able to negotiate the price downward and pay cash.
Same day delivery - I'm a happy boy

 

[jyoutz]

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 150+ Massey is built more for the rigors of framing than Kubota.

Probably so, but most of this forum discussion is focused on compact and utility sized machines.

 

[Hay Dude]

Probably so, but most of this forum discussion is focused on compact and utility sized machines.

Most, but not all. Plenty of people here with interest and searching for farming knowledge

 

[rScotty]

Most, but not all. Plenty of people here with interest and searching for farming knowledge

It's always enjoyable to talk to someone about something that they are doing. Anytime I've even started in on a different career, talking over the options is how we explored different ways to do something. Farm talk is fun talk.

Now if I wanted farming advice, that's different. I'd probably look for someone who used to farm, made a success of it, and now was doing something else.

rScotty

 

[rScotty]

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.

Sure, that's a good point and it seems to me that it would work. I'm not a factory owner so really don't have any idea of the finances of running a big factory. From my own small business perspective what you are saying makes sense.

If there's one good reason, there are probably others. I'm sure there are many scenerios where zero percent makes financial sense

Many decades ago, I sold and repaired motorcycles. Half the year we made money and half the year not. But I still had plenty of expenses. Including wages, rent, and the floor plan fees for unsold bikes. So half the year our numbers were positive and half the year they were negative. Zero percent is just a number that is one heck of a lot better than a negative number.

rScotty

 

[2manyrocks]

ArlyA's post is really helpful in pointing to potential reasons why Kubota would want to produce and sell a certain number of tractors at its most efficient cost of production relative to profit. They may also have figured out that offering 0 percent financing gets them to the point of optimizing their production/sales goals because they can reach that many more customers by offering that kind of financing.

I don't know what the relative market shares were, but I would guess Yanmar and Kubota were maybe equals in USA market share back in the late 1970s or very early 1980s. Yanmar withdrew from direct sales in the USA for a period while Kubota kept building their market share. If anyone could post their relative USA market shares from say 1980 to today, I think that would be interesting to see. I doubt there's any public information available, but I'd also be curious how 0 percent financing might have contributed to them building their market share.

 

[ovrszd]

The o% concept came about almost overnight by many Manufacturing companies. Our gullible society ate it like candy. Great marketing strategy that has finalized the sale of a LOT of product.

 

[CloverKnollFarms]

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

Depends. Kubota likes to sell a stripped down tractor. Everything is extra. I’ve never seen so many utility tractors without a single remote standard. Massey has some very nice options that are standard, which offsets the price difference

 

[scootr]

Porsche has been doing that for decades. Everything is an extra. 1980 you want an ashtray that's extra. And in 2000 you don't want an ashtray that's extra. But people still come back.