'Botanomics 101

   / 'Botanomics 101 #1  

Tom_H

Veteran Member
Joined
Mar 27, 2004
Messages
2,439
Location
20 mi SE of Sacramento, CA-rural
Tractor
Kubota BX2200
\'Botanomics 101

Yesterday, in one of his posts, Junkman said you'd better be sitting down when you learn the price of a new B2630 or B3030. I got to wondering what could make them so expensive. Fuel/shipping costs were up, but are now dropping. Steel surcharges hurt, but they aren't that much. Then I started wondering if Kubota prices are tied to the dollar or the yen.

I'm under the impression most 'Botas for sale here are assembled in Georgia, but don't know where most of the parts are made. The dollar has been dropping against the yen for a long time. That means U.S. manufacturers can export more easily, but it also means that imported items (like tractors) cost more. This can be good for the trade deficit, yet it makes imported items more expensive to U.S. consumers who have gotten spoiled on low import prices. I came up with several questions related to Kubota and economic issues. I know I probably could find some of this info. on Kubota's own site, but thought it would be a lot more fun to ask what you guys know about these things. Here goes:

1. How many Kubota products sold in the U.S. are assembled in the U.S.?

2. Of the products assembled in the U.S., what percentage of the parts are manufactured in the U.S., in Japan, in other places?

3. Is the price we pay for a Kubota product tied to the dollar or the yen? To what extent does the slide of the dollar against the yen affect the price you and I pay?

4. When you or I buy a Kubota product, what percentage of the money we pay stays in the U.S. and what percentage gets shipped off to Japan? Obviously the assembly workers in Georgia get part of it as well as the U.S. local dealers. I also wonder what percentage of Kubota stock is owned by U.S. citizens, mutual funds, or other corporations, and what percentage of the stock is owned by the same entities in Japan, as well as nations other than these two. Obviously some Kubota profits come back to Americans who own Kubota stock, but how much?

5. How has Kubota stock performed in the last couple of years? Do any of you guys own stock in Kubota? If so, have you been pleased or displeased with it?

Well, this post is for fun (but in some seriousness it's also out of curiosity about where our money goes). For any of these questions that you want to share your facts or opinions about, please go for it. I'm not lookin' for anything that will help me make any decision, just thought I'd open this can of worms to see what's there.
 
   / 'Botanomics 101 #2  
Re: \'Botanomics 101

</font><font color="blue" class="small">( ... Steel surcharges hurt, but they aren't that much... )</font>

I believe these steel surcharges were declared unfair by the federal court system as an unfair trade practice. I'm not 100% on this but a good friend and GM of a major call dealership told me this after I ask what effect the surcharge would have on the 2005 Ford prices.
 
   / 'Botanomics 101 #3  
Re: \'Botanomics 101

</font><font color="blue" class="small">( Yesterday, in one of his posts, Junkman said you'd better be sitting down when you learn the price of a new B2630 or B3030. I got to wondering what could make them so expensive. Fuel/shipping costs were up, but are now dropping. Steel surcharges hurt, but they aren't that much. Then I started wondering if Kubota prices are tied to the dollar or the yen.)</font>

Would not know why, the price is about the same as the tractors that they replaced. If oddly high reports are comming in its probably a dealer trying to capitalize on the fact that they are new.

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

1. How many Kubota products sold in the U.S. are assembled in the U.S.?)</font>

Its right around 40%. The RTV's, T,TG,G,GR,BX are all built right outside Atlanta. The Loaders, Backhoes, and Mower Decks are done in a seperate Kubota factory and are 100% american made. All this is done by a wing of Kubota known as KMA - Kubota Manufacturing of America.

Final assembly is done on the TLB's and M-Series tractors as well, but they come into the country pretty well ready to go less tires.

</font><font color="blue" class="small">(
2. Of the products assembled in the U.S., what percentage of the parts are manufactured in the U.S., in Japan, in other places? )</font>

Of those the Engine and Tranny are drop in assemblies from Japan, the rest is built here.

</font><font color="blue" class="small">( 3. Is the price we pay for a Kubota product tied to the dollar or the yen? To what extent does the slide of the dollar against the yen affect the price you and I pay? )</font>

To my limited knowledge, no. Kubota has waited the longest of any manufacturer to adjust their pricing. Deere and New Holland are about equally affected by these price swings.

</font><font color="blue" class="small">(
4. When you or I buy a Kubota product, what percentage of the money we pay stays in the U.S. and what percentage gets shipped off to Japan? )</font>

I don't think anyone but the guys at the top can answer this. Kubota employs about 4000 people in the US though KMA, the regional distribution centers and the local sales reps. Their facilities are not shabby either, they have made quite an investment in the US market and are talking about expanding more. If it where not for the name it would be difficult to know this is a Japaneese company.

</font><font color="blue" class="small">(
5. How has Kubota stock performed in the last couple of years? Do any of you guys own stock in Kubota? If so, have you been pleased or displeased with it?)</font>

I mapped all the big tractor vendors against each other awhile ago. I don't think anyone else found that as interesting as I did. The results are what you would expect. The big 3 all tracked pretty close to each other. Mahindra does pretty well, due to their foreign success. Kioti has been the worst preforming.

</font><font color="blue" class="small">( Well, this post is for fun (but in some seriousness it's also out of curiosity about where our money goes). For any of these questions that you want to share your facts or opinions about, please go for it. I'm not lookin' for anything that will help me make any decision, just thought I'd open this can of worms to see what's there. )</font>

I am clearly biased on these issues, but I can't speak of Kubota's business practicies highly enough. They are a much better run, and better managed company than CNH. Many of their employee's left CNH to join Kubota and they all have lots to say. I am certian that when you buy a Kubota product less of your dollar ends up being wasted in red tape.
 
   / 'Botanomics 101 #4  
Re: \'Botanomics 101

On this date in 2001, there were 131 yen to the dollar and today there are 104. This is a 20% fall in the value of the dollar which affects all product imported from Japan.

So, just as a SWAG, if 15% of the cost of a complete tractor can be attributed to Japanese content, then that alone would increase the price by 3% over the 3 years.

Add to the exchange rate inflation, shortages, fuel surcharges, etc. and a $6000 increase on a $18000 tractor is pretty reasonable.
 
   / 'Botanomics 101 #5  
Re: \'Botanomics 101

</font><font color="blue" class="small">( 2. Of the products assembled in the U.S., what percentage of the parts are manufactured in the U.S., in Japan, in other places?)</font>

From past experience, this is nearly impossible to determine. How do you calculate the percentage? Weight, parts count, or what? Harley riders and their detractors are always arguing about the % American made, though the utility of the argument escapes me. The fact is, we now have a global economy and it will become more so and not less in the future.

Pete
 
   / 'Botanomics 101 #6  
Re: \'Botanomics 101

</font><font color="blue" class="small">( ( 3. Is the price we pay for a Kubota product tied to the dollar or the yen? To what extent does the slide of the dollar against the yen affect the price you and I pay? )
)</font>

Back in the day, we were getting around 300 Yen for a dollar. Talk about your inexpensive stereo systems! Some were buying motorcycles, cars & pkups and shipping them back to the "world" and it still came out alot cheaper.

Part of my decision making process on picking the tractor I did was based upon the manufacturer having a large manufacturing investment in the USA. There will probably never be any product that is made entirely buy purely American parts & labor and I'm OK with that. But, those manufacturers that benefit me in more than just the product I purchased from them definitely gets the nod when it comes to check writing time /forums/images/graemlins/wink.gif /forums/images/graemlins/grin.gif

Wonder what Kubota stock is going for now and if'n theres gonna be a split anytime soon.

Volfandt
 
 
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