Price Check Price trends

[maryos]

Have Kubota prices gone up much over past 2-3 years? I understand they launch new models in November each year – are prices on these much more than for previous year?
If anybody has any examples, or if there are any other websites I should check, I would be very grateful.
Thank you!

 

[equipman]

Aside from the steel increases last year, it seems like Kubota prices have stayed pretty close or even gone down on some models. I think since Kubota can control the manufacture process they have a better chance to control prices.
Lewis

 

[SkyPup]

I paid less for a new L-39 TLB thisyear than what you would have paid for the L-35 TLB it replaced three years ago... hard to believe but true. /forums/images/graemlins/grin.gif

Bloomberg reported today:

"Deere, the world's largest maker of farm equipment, said last month that prices of its products will rise 4 percent for the year."

``Our price realization and what our customers are willing to pay for has been very encouraging for us,'' said Robert Lane, chief executive of Deere, in an Oct. 7 interview on Kiawah Island, South Carolina. ``That's why you see another very good profit year coming up and a lot of cash being generated.''

 

[MessickFarmEqu]

</font><font color="blue" class="small">(

``Our price realization and what our customers are willing to pay for has been very encouraging for us,'' ``That's why you see another very good profit year coming up and a lot of cash being generated.'' )</font>

My, they sure are not ashamed of that fact.

 

[SkyPup]

You heard it from the horses mouth.

Time is now to purchase more Deere stock, any corporation that can generate that kind of cash year in and year out is a good buy! /forums/images/graemlins/wink.gif

 

[maryos]

Thank you all very much for these replies. Does this mean there were price hikes specfically tied to the steel price increases? Is this common to all the main companies in this list?

I was also interested to know whether Kubota tractors really are more fuel efficient than many others? Perhaps I need to start a new thread, or try one of the other forums?

Thanks again,
Mary

 

[SkyPup]

Steel, Iron, Plastic, Rubber, etc. have all gone UP in price significantly.

Fuel efficiency is a matter of power, gearing, and work performed, I don't think any tractor brand is inherently more fuel efficient than another.

That said, our three tractors are all 3-cylinder diesels, specifically for greater fuel efficiency than a larger 4-cylinder model.

 

[Cliff_Johns]

</font><font color="blue" class="small">( "Deere, the world's largest maker of farm equipment, said last month that prices of its products will rise 4 percent for the year." )</font>

I suspect this is mostly in their ag lines of machinery. In the CUT and sub-CUT areas new products are replacing more expensive previous models with the same features. That is, prices are going clearly down for the kinds of equipment we discuss for the most part on TBN.

Cliff

 

[riptides]

Well,

</font><font color="blue" class="small">( ``Our price realization and what our customers are willing to pay for has been very encouraging for us,'' said Robert Lane, chief executive of Deere, in an Oct. 7 interview on Kiawah Island, South Carolina. ``That's why you see another very good profit year coming up and a lot of cash being generated.'' )</font>

I don't know how to take that quote from them.
The consumer in me says "Screwed"
The invester in me says "Thanks for the insight"
The corporate citizen in me says "Shut the he** up".

Is it bordering on arrogance? Or is it just my attitude?

-Mike Z. /forums/images/graemlins/grin.gif

 

[maryos]

The quote above, in isolation, would imply that customers are being treated as fools and willing to pay for rubbish. In fact it made me so curious, I went to check out what he actually said! In case it is any consolation, the full comment is not quite as bad:

"We had good success in passing on value to our customers. In other words, our customers don't care about our costs, but we have been able to improve on these products in a way that our price realization and what our customers are willing to pay for has been encouraging to us."

So he is saying that customers aren't interested in whether eg. steel prices have risen, hurting Deere's margins - customers only want to know they are getting a good deal. Therefore they can't just push up prices to compensate, they have to improve on products, and add value to make the customer interested.

Is it true though? A message above implied that Kubota did levy price increases in direct response to higher steel costs. Is this actually the case for most companies generally?

Still very interested in any info about price trends, especially for Kubota or for Kubota relative to other companies. Was very interested in above remarks about prices coming down - is this the case generally for other firms as well?

Thanks again,

Mary

 

[orangebluegreen]

Interesting 5yr chart.
http://finance.yahoo.com/q/bc?s=DE&t=5y&l=on&z=m&q=l&c=kub

Will this trend continue or will the new JD’s reverse the trend? If Kubota doesn’t have any new B’s, the JD 2520/2320 may bite into that area. Then again, in my opinion JD’s pricing being higher than KUB’s may bring even more buyers to KUB if the economy were to slow. Reading recent reports shows JD smaller tractor sales dropping while KUB’s have increased. This is documented in some of my other posts I’m too lazy to dig up.

I just looked at a few of the basic ratios of growth vs. earnings, market cap vs. earnings, etc and find both companies priced relatively evenly, though perhaps value oriented compared to the majority of companies out there. I didn’t do a thorough look, just a quickie, didn’t look at debt, etc, there are many other points to consider in valuing the two companies against each other. Obviously dependant on the economy, and with interest rates rising and the excesses in real estate pricing now breaking IMO, could be they keep a low PE. I’ve not analyzed how these companies perform in slow-downs of the economy, if the agricultural needs make them a haven for institutional money, or do they take a hit because farmers decide to keep the old equipment another year or so?

There is only one analysts covering KUB compared to 15 on DE so it’s not a great comparison, but Yahoo shows JD’s estimated “current quarter 05” estimates as being reduced by a large margin compared to the estimate of 90 days ago (44% drop) . They also show expected growth next yr for JD at 10.7% vs. KUB 14.2%. Have to take into consideration subsidiaries in that. A caveat about analyst’s projections...they brought us the .com bubble and Enron.


http://finance.yahoo.com/q/ae?s=DE

http://finance.yahoo.com/q/ae?s=KUB

 

[SkyPup]

Kubota originally moved in where International Harvester left off due to good management taking advantage of dubious management, kind of like GM and Toyota.

 

[maryos]

My apologies: I should have made the title of the thread more clear - I am interested in prices of Kubota tractors, whether these have been increasing and whether Kubota tractors are more expensive than other makes (if so, why? are they more fuel efficient?) I can see that I may have confused the issue in my second post.

I know that Kubota hosts a convention every November and uses this to introduce new models. I had imagined that new models would be much more expensive than previous ones. But apparently this is not the case (indicated by earlier response).

Thank you for your interesting response, nevertheless - I'm now off to check those Yahoo charts.

Mary

 

[orangebluegreen]

Mary, my apologies to you, I should have made more clear my response was to skypup, although I assumed it would be clear since it was linked off his post.

IMO if sales are falling off, which they have due to many factors including economy, CUT buyer saturation, drought and probably a hundred other reasons, then one would assume prices would drop to follow the drop in sales. This however appears to be regional and depends on equipment size. The smaller under 40HP tractors have fallen off more than the larger. In my own looking since this summer, I’ve seen a decrease of roughly 10% since June’s advertised pricing. Obviously prices peak at that time of year so it still remains to be seen if we are in an extended down turn. One thing that gives tractor manufacturers a pricing advantage is they do not place a year on any given tractor, so it can sit on a lot for years and be sold as new. As to asking if the future or past will be up or down....good luck. Assuming many posters here are probably dealers, I wouldn’t expect them to say anyone will soon be begging you to buy. Perhaps try calling your dealer and ask him if prices are going down?
http://www.aem.org/Trends/USAg/

 

[maryos]

Thank you - that is clear now, my mistake, sorry. Thanks for interesting link too.

I suppose what I am interested in knowing is whether Kubota has pricing power relative to other brands. so whether Kubota is keeping prices higher, or at least offering less in the way of financing incentives, on the basis that their models are better quality, more efficient... etc. I believe this is the case for Deere, for instance. just not sure about Kubota.

I also notice that Kubota has become much more widespread in recent years - seems to be taking market share. I am writing from UK where even here Kubota tractors are now quite usual (at the <40 hp end). Yet looking on the web it does not seem that their models are particularly cheap; in fact they seem to be at the high end, price-wise (I am not sure if they are at the high end across all the product range, or just on specific models).

Also, I wonder how dealers determine the price; presumably there is a recommended retail price for each model, but the dealers will have some discretion in what profit they choose to make from the wholesale price? (I am interested in how it works for the US dealers)

This is a very interesting site - perhaps if I browse it some more, I will find more answers to the above questions...!

Thanks again,

Mary