Is Kioti Viable for the Long Term??

froggy · May 12, 2005

Do you think Case/New Holland will still be owned by Fiat?

Let's hope not! /forums/images/graemlins/grin.gif

froggy · May 12, 2005

Look at this speech by Robert W. Lane,Chairman & Chief Executive Officer of Deere & Company on February 23, 2005 about Deere's push for world wide sales:

http://www.deere.com/en_US/compinfo/speeches/2005/050223_lane.html

MessickFarmEqu · May 12, 2005

( Do you think Case/New Holland will still be owned by Fiat?

Let's hope not! /forums/images/graemlins/grin.gif )

Doubt it, its the only part of that company that makes money. They have been talking about spinning it off for awhile.

viking65 · May 12, 2005

Bob's quote: "I think there is a reasonable possibility the niches could be very regional or even local."

How long can a tractor manufacturer survive filling local niches here and there?

How long can Zetor be around selling 500 tractors a year?

Bob_Skurka · May 12, 2005

Neil wrote: Frankly, I am surprised that they can even remain in the market at 500 tractors a year. What must the profit margin be on this stuff for them to even cover their overhead costs?

Me too, in fact at only a couple thousand units a year total production, I'm amazed they can stay in business at all.

Don wrote: A don't know any lenders that give loans for 20 years or even 10 years on tractors.....and the interest would be pretty steep. 

I admit to often being dazed and confused, but what the heck does this have to do with anything? The post had nothing to do with loans, interest rates, etc.

Don wrote: 20 years from now the landscape of the Big 3 could be totally different. 

I tend to agree that it will be totally different. It seems to change every 20 years or so. All you have to do is look at the tractor market from the 1930s to today and you can see it is in a constant state of flux.

Don wrote: Do you think Case/NewHolland will still be owned by Fiat? 

No, but again, I'm not sure what that has to do with anything.

Given the profitability of this division, and given the financial bleeding of FIAT, and given the Fiat family's personal financial holdings in the company that bears their name, and their desire to attempt to turn the car company toward profitability, it would be financially likely that they would sell off a profitable division to attain needed cash. As they just got a $2 Billion cash influx from General Motors from a reverse posion pill anti-buyout contract between the 2 companies, they are in no rush to sell CNH, but it is still likely the sale will occur in the next couple of years.

getut wrote: As long as that relative price stays lower than the big three and quality stays excellent, then Kioti will grow like gangbusters. 

I agree. But I also think this same statement will apply to other manufacturers like Mahindra.

shoppintractors · May 12, 2005

I admit to often being dazed and confused, but what the heck does this have to do with anything? The post had nothing to do with loans, interest rates, etc.

I'll talk loud and slow. /forums/images/graemlins/tongue.gif

viking65 wrote: If the cost is $2000 more for the JD over the Kioti the $100 (27.3 cents per day) a year over 20 years is certainly worth it to buy a tractor that you know will have support than gamble on one that very well may not. 

The reality is tractors loans are due in 3 to 5 years, so 27.3 cents per day over 20 years is nice in theory. The reality is the extra $2000(per the example) has to be paid off in three to five years.

Don wrote: Do you think Case/NewHolland will still be owned by Fiat?
Bob responded: No, but again, I'm not sure what that has to do with anything.

My point is, there is no guarantee the 'Big 3', as we know them in their present "form", will still be in that same "form" 20 years from now.

Don

Bob_Skurka · May 12, 2005

Don, regardless of how the consumer pays for the tractor, cash or loan, the cost of the tractor is amoratized over the lifespan of the tractor NOT over the life of the loan. The cost difference is still 27.3 cents a day over the 20 year lifespan.

 Don wrote: Do you think Case/NewHolland will still be owned by Fiat?
Bob responded: No, but again, I'm not sure what that has to do with anything.

My point is, there is no guarantee the 'Big 3', as we know them in their present "form", will still be in that same "form" 20 years from now. 

Don, I think viking65 was more concerned about the company pulling out of the US, not a change in corporate ownership. Many companies have a technical change of ownership, but they still continue to operate. Based on the initial post by viking65 and his follow up posts, I think you missed the point. I think he was wondering if Kioti might not have the staying power to remain in the US and provide parts in the future.

So while you are now interjecting "form" of ownership into the thread, the question really doesn't pertain to who owns it, it pertains to if will be here in the US in the future at all.

shoppintractors · May 12, 2005

Don, regardless of how the consumer pays for the tractor, cash or loan, the cost of the tractor is amoratized over the lifespan of the tractor NOT over the life of the loan. The cost difference is still 27.3 cents a day over the 20 year lifespan.

Understood Bob. I'll see if my check book thinks it can spread it out over 20 years... /forums/images/graemlins/smirk.gif

Based on the initial post by viking65 and his follow up posts, I think you missed the point. 

Actually Bob...I was just expanding on the initial question. /forums/images/graemlins/wink.gif

Don

viking65 · May 12, 2005

Tractor loans??? I'm not talking about borrowed money to pay for a tractor. No need to muddy the waters with tractor loans.

It's very simple, in my example of a JD v. a Kioti, the extra $2000 to buy the JD over the Kioti is 27.3 cents per day over 20 years. Black and white.

So, for 27.3 cents per day over 20 years you are buying John Deere, a proven leader in the industry, unmatched dealer network, parts availability, and resale value. For the thrifty tractor buyer to pocket that 27.3 cents per day you can buy from a second tier tractor builder with a sketchy dealer network, questionable dealers, and no clue if they will even be around in 5 to 10 years and resale values that do not come close to a big three brand.

shoppintractors · May 12, 2005

So, for 27.3 cents per day over 20 years you are buying John Deere, a proven leader in the industry, unmatched dealer network, parts availability, and resale value. For the thrifty tractor buyer to pocket that 27.3 cents per day you can buy from a second tier tractor builder with a sketchy dealer network, questionable dealers, and no clue if they will even be around in 5 to 10 years and resale values that do not come close to a big three brand. 

Sounds like you need to buy a John Deere. Good Luck!

Don