Why are TYM and Branson so much less??

[prof fate]

Marketing costs are probably the biggest difference.

Watch TV, read farm papers - you see Kubota and Deere ads often - quite often. That is expensive.

Not sure I've ever seen a kioti, LS or TYM ad, maybe mahindra once in a blue moon.

Marketing costs can run 20% or more of the total costs in a company.
They have nothing to do with the quality of design, enginerring or assembly of the product.

Yes, Kubota and Deere want to sell tractors, but their actual customers are THEIR DEALERS - having spent over a decade in the powersports industry (motorcycles, snow mobiles, watercraft, ATVs) I've seen this how some of this works (i say some as I'm sure there's more I'm not aware of).

If you figure you'll spend 10% of your sales on marketing and you sell 5,000 units a year, vs selling 50,000 units a year, it has a MASSIVE impact on what you have available for marketing.
Yamaha would run advertising deal with local dealers - paying a portion of the local marketing (tv, billboards, whatever you wanted to do). How much they paid (percentage) was based on how many units the dealer bought, sometimes there were special incentives on specific units or programs (we'll pay 20% extra if you say zero down in the ad type of thing).

SO - k and JD have a lot more marketing muscle - and they use that to convince dealers to sign up (would you as a dealer rather sell JD or Kubota - or Kioti and TYM?)

If you do the math, there is very little cost difference between say, a BMW and a Ford, or a high end SUV and an economy car - engineering, factory, labor, parts stocking, distribution, etc are not that much different. What they can charge IS very different based on market demand. People want 4 door pickups and SUVs..no minivans and economy cars. Proof is what ford just announced - they're not making cars after 2020 (mustang and one economy car) - only trucks and SUVs. Even porsche is making SUVs now.

Is there a cost savings in 'support'? Fewer dealers maybe fewer warehouses, less parts on a shelf so longer wait time? Are steel fenders cheaper to make than plastic? (my kioti has steel hood and fenders, not plastic)? Probably, but not enough to explain a 10% or way more cost savings.

I paid less for my Kioti (with options that match an RK/TYM) than RK wants - BUT- the backhoe option for RK is about $5k, it's 7500 for kioti...why? Other than economies of scale I have no idea

 

[GirlWhoWantsTractor]

Tym does not make Branson tractors. Branson makes it's own tractors.. Tym and Branson just completed an acquisition as a group so they are still two separate companies.

TYM bought Kukje Machinery Co, the Korean tractor company that made Branson, a couple years ago, and acquired all of its assets. So Branson is now a wholly owned subsidiary of TYM. This acquisition made TYM the largest Korean tractor manufacturer, which was their goal. Apparently TYM plans to have Kukje continue to make Branson brand tractors for them, at least for now. Which is good news for Branson owners.

 

[GirlWhoWantsTractor]

It's pretty common in many markets for up and coming companies hoping to grow market share, to make less profit while establishing a brand. And, as was already pointed out, there may be less spent on marketing. From what I can see, Branson barely spends any money on U.S. marketing. Their web site is rarely up to date. I suspect their budget for trade shows, sales brochures, dealer support, etc., is dramatically lower than Deere, Kubota, etc. They pass that savings along to buyers, as part of a pricing advantage. If they win more market share and shore up their position in the market, they may change that over time. That would be normal.

There is more risk with a lower market share brand, that they will give up on the market, or the market rejects them. That was less of a concern when tractors were simpler. It's a greater concern now that it's harder to do shade tree work on a newer tractor.

Now that they've been acquired by TYM, if TYM wants to keep the Branson brand long term, you may well see more Branson marketing!

The "value" company may have other cost advantages besides lower advertising costs, such as economies of scale, efficiencies in distribution, etc., that allow them to undercut the competition. For example, RK has eliminated the dealer, cutting out one middle-man, which allows them to offer a high-quality, well-optioned product at a lower price.

There are risks at every level, but it's a quicker slide to oblivion for a less established company.

 

[Steppenwolfe]

You usually get what you pay for... There is always a reason for cheaper cost, it has to factor in...

 

[radios1]

Kubota is a Japanese tractor , Branson and TYM are made in south Korea. I would say that all compact tractors under 60 hp are made overseas i.e. South Korea, Japan and India.

except for John Deere, which is made in the U.S.A. and they have the factories here to do that.. there MAY be other manufacturers that do that too..

 

[CincyFlyer]

TYM bought Kukje Machinery Co, the Korean tractor company that made Branson, a couple years ago, and acquired all of its assets. So Branson is now a wholly owned subsidiary of TYM. This acquisition made TYM the largest Korean tractor manufacturer, which was their goal. Apparently TYM plans to have Kukje continue to make Branson brand tractors for them, at least for now. Which is good news for Branson owners.

TYM also builds the chassis (but not the engine) for several Mahindra models, including the one I drive. (It has a Tier IV Mahindra engine.)

 

[GirlWhoWantsTractor]

except for John Deere, which is made in the U.S.A. and they have the factories here to do that.. there MAY be other manufacturers that do that too..

Most of the large JD farming equipment is manufactured here. Most of their tractors under 100HP are not. Some are assembled here from components made in Japan, Germany, Mexico, India, China, Canada, etc. Some are wholly manufactured and assembled overseas and shipped here. Here's a list of the factories where each JD model/year was built or assembled:

TractorData.com - John Deere tractors sorted by factory

Here's a nice pic of a JD rolling off the line in Mannheim, Germany (one of 6 JD factories in Germany). They turn out 30k tractors per year, and 28% are shipped back to America.

 

[Tractorable]

except for John Deere, which is made in the U.S.A. and they have the factories here to do that.. there MAY be other manufacturers that do that too..

Please show us a John Deere, under 60hp compact tractor, that’s Made in USA.

 

[TomIre]

Marketing costs are probably the biggest difference.

Watch TV, read farm papers - you see Kubota and Deere ads often - quite often. That is expensive.

Not sure I've ever seen a kioti, LS or TYM ad, maybe mahindra once in a blue moon.

Marketing costs can run 20% or more of the total costs in a company.
They have nothing to do with the quality of design, enginerring or assembly of the product.

Yes, Kubota and Deere want to sell tractors, but their actual customers are THEIR DEALERS - having spent over a decade in the powersports industry (motorcycles, snow mobiles, watercraft, ATVs) I've seen this how some of this works (i say some as I'm sure there's more I'm not aware of).

If you figure you'll spend 10% of your sales on marketing and you sell 5,000 units a year, vs selling 50,000 units a year, it has a MASSIVE impact on what you have available for marketing.
Yamaha would run advertising deal with local dealers - paying a portion of the local marketing (tv, billboards, whatever you wanted to do). How much they paid (percentage) was based on how many units the dealer bought, sometimes there were special incentives on specific units or programs (we'll pay 20% extra if you say zero down in the ad type of thing).

SO - k and JD have a lot more marketing muscle - and they use that to convince dealers to sign up (would you as a dealer rather sell JD or Kubota - or Kioti and TYM?)

If you do the math, there is very little cost difference between say, a BMW and a Ford, or a high end SUV and an economy car - engineering, factory, labor, parts stocking, distribution, etc are not that much different. What they can charge IS very different based on market demand. People want 4 door pickups and SUVs..no minivans and economy cars. Proof is what ford just announced - they're not making cars after 2020 (mustang and one economy car) - only trucks and SUVs. Even porsche is making SUVs now.

Is there a cost savings in 'support'? Fewer dealers maybe fewer warehouses, less parts on a shelf so longer wait time? Are steel fenders cheaper to make than plastic? (my kioti has steel hood and fenders, not plastic)? Probably, but not enough to explain a 10% or way more cost savings.

I paid less for my Kioti (with options that match an RK/TYM) than RK wants - BUT- the backhoe option for RK is about $5k, it's 7500 for kioti...why? Other than economies of scale I have no idea

Great explanation. Thanks. I do know manufacturing is a game of saving literally pennies whenever you can. Times number of units it adds up quick.

 

[ruffdog]

Please show us a John Deere, under 60hp compact tractor, that’s Made in USA.

The wifes X744 says "made in usa" "moline Il" on the serial number tag. The engine is a Japan Yanmar.