Bye, Bye Branson???

[buickanddeere]

I haven't read the entire post but anyways . Kukje has built equipmemt for Deere, Yanmar, Cummins and Montana .
Who knows what parts may mix and match ?

 

[Handloader109]

Interesting thread. I do think a better network of dealers is needed, but what you fail to see is that the parent company may not even be thinking about the US market. What percentage of their sales is us? 5 or 6?

 

[AxleHub]

Interesting thread. I do think a better network of dealers is needed, but what you fail to see is that the parent company may not even be thinking about the US market. What percentage of their sales is us? 5 or 6?

Greetings Handloader109,

I think you need to look at the situation from a different angle. You're suggesting they may not see the U.S. as a major emphasis because its only a very small part of their activity . . . while I ser it as avery small percentage because of their failure to develop what is supposed to bea big part of their market.

Couple points to consider:

Obviously they wanted Cabelas to succeef and develop all their stores eventually to Land Management with TYM made tractors.

Obviously not properly developing the U.S. market mire fully makes their costs in the U.S. to dealers more expensive because they can't get the economies if scale.

Spotty dealerships makes TYM a more regional effort and harder to market measured by cost or competition. If TYM makes good product at reasonable pricing . . why would they not want far bigger impact in the U.S. to keep their economies of scale more lucrative and develop greater customer allegiance? Certainly they have no difficulty with manufacturing capacity . . . and Cabelas was a ray of hope that has now faded (for TYM tractors).

They bought Branson . . an American company. They are deeper financially committed than before . . but without the dealer network at this point to support it (Cabelas oppirtunity gone and Branson dealers weak).

Think of it this way . . you don't have a fleet of Nascar type race cars but only 6 drivers for them . . or the cars just sit. Now they've added even more race cars to the fleet but still very few drivers to "make them go". If TYM's products were weak . . its a different story . . but we keep hearing on TBN that the products are good. But I've never seen one at the Minnesota State Fair (a big tractor/ag event). I know no one who has one. Never even seen a used or older one. No dealers for 140 miles that I'm aware of . . except green Cabela units that I've sern nany times in many places.


My viewpoint is that TYM's marketshare is small in the US because uts self fulfilling . . they don't have enough saleforce to sell them . . and with Cabelas tractor effort now changed . . TYM needs even more to develop that sales force whether they bought Bransonn or not imo.

 

[DavesTractor]

TYM sells thousands of tractors a year in the USA to/via Mahindra. Many manufacturers over the years have struggled to retail, even as they produce fine tractors. Take Yanmar for example. I do not sell them, but I do not mind saying that it is a top quality tractor, perhaps none better. But they have flopped numerous times trying to retail direct in the USA. They did sell maybe 100k units as John Deeres in the late 70's through the 90's, and then continued on with JD to a lesser extent. Nice machines, but breaking into the USA market and setting up distribution, parts, dealers, etc. is not easy. Good tractors, fair prices...but market share didn't even make the needle move.

TYM has struggled with a dealership base and distribution model over the years as they try to sell direct. But a real problem for their profitability was that they always had to buy an engine. Not many know this, but if a manufacturer buys a Tier IV engine from some other company for a 25-40 HP tractor, nearly half the actual costs of the tractor go to the engine. That makes it tough to be profitable, the only one making a sure fire profit is the engine manufacturer. TYM needed the Kukje/Cummins engine. Another factor, is that Branson is a little like Kubota and Yanmar in that they make nearly all of the tractor themselves. TYM has historically bought more components from other sources that Branson has. What Branson has lacked is an enthusiastic parent company, but now that has changed. TYM will be more profitable as they share engines with Branson, and as their costs go down, they can make the tractor line more desirable to new dealers.

Another interesting connection is that the original president and founder of Branson Tractors (USA) back 15-20 years ago is now the new VP of TYM in the USA. I suppose when Branson (Korea) bought him out years ago he probably had a non-compete for a certain amount of years, but we are glad to see him back. He's a good man, honorable, knowledgeable, fair.

So it is hard to know how all of this will play out, but I am optimistic about it. We sell a Branson a day on average (plus Mahindra) and we are not worried.

 

[AxleHub]

Dave,

If buying engines was such a big concern . . them why do manufacturers like John Deere deliberately go out of their way to do exactly that?

 

[Btown]

Dave, If buying engines was such a big concern . . them why do manufacturers like John Deere deliberately go out of their way to do exactly that?

Maybe this is why Deere prices are sooooo much higher for similar sized tractors?

 

[DavesTractor]

Dave,

If buying engines was such a big concern . . them why do manufacturers like John Deere deliberately go out of their way to do exactly that?

That's actually a good point. Many, many brands buy engines from other makers. JD has an economy of scale and can probably demand a pretty good deal, and of course they have generations of devout followers that will pay extra if needed. For a smaller manufacturer, especially with all of the Tier IV regs, I think it is a factor.

And if JD had or has a better internal option, certainly they would use their own engine.

 

[AxleHub]

Maybe this is why Deere prices are sooooo much higher for similar sized tractors?

When jd had their own engines way back when their prices were higher than others. What j.d. has is an excellent sales and marketing strategy combined with decent product often made by others parts and components.

The difference between TYM/Branson and J.D. business models is j.d. completely understands that name recognition and dealership development mixed with decent product is the key . Comparing any product level that TYM and j.d. each have product in . . . both use other manufacturers engibes and both make a bunch of their own compinents plus others' components. Both company's products are capable and durable.

Both company's also do development work and engineering design of their own equipment. But one has always had a stribg emphasis on selling and dealer development . . and one doesn't.

Now each makes a decent product. And one sells for considerably higher pricing. Dave's Tractor says TYM just needs internal built engines to be successful. But the Branson engines didn't solve Bransons need for sales. Does TYM/Branson need engines to be successful? I think TYM needs 150 or 200 more Dave's Tractor dealers. And Branson needs 100+ more. You can't sell from dealerships you don't have. Jmho


TYM had a great opportunity from Cabelas . . but it didn't work because Cabelas couldn't ramp up fast enough and so its done. Too bad because Cabelas does know howvto market. So TYM's going to have to do it themselves.

 

[murphy1244]

And deere has been selling tractors here for how long? Now its mega dealers.

 

[jmh1783]

The question of make it in house or outsource it isn't a no brainer. Companies keep going back and forth on this type of decision. I know the one I work with loses business on occasion because they make a component and not the entire solution unlike their competitors. On the other hand we look brilliant because we make the piece that has the highest profit margin where as the other components are commodity.

Deere could decide tomorrow to start making its own engines everyone would say how brilliant they are. Specifically when it comes to engines it may be an issue with availability. Maybe TYM didn't have too many options to buy engines that met their needs and standards.

Building a dealer network is a tough thing to do in any business. A lot of companies are ill prepared to do what it takes. They have a "build it and they will come" attitude. It is really a lack of the right type of people to tackle the problem. You don't send an engineer. You need some skilled marketing, sales, logistics and communications people and of course management that is willing to listen.