GManBart
Elite Member
- Joined
- Dec 10, 2012
- Messages
- 4,976
- Location
- Detroit, Michigan
- Tractor
- Massey Ferguson 241, Kubota SVL90-2
We keep hearing about the price of the LS in comparison to the Kubota or JD. The thing that confuses me is how can they build a "comparable" tractor for less. Lets take a Grand L Kubota for example. It has a Kubota engine, trans, differential, loader and cab on it. So since Kubota is using their own engine they should be able to keep the cost down by using it. I don't thinK LS uses their own engine. Kubota sells more equipment than LS so shouldn't they get a better price on stuff like seats, wheels, tires, switches, senors, glass, bulbs, steering wheels, and other small parts. So how can LS build the same tractor for less?
I don't think anybody discounts the fact that there are a couple of higher tech options available with Deere and Kubota (HST+ and eHydro, for example), and those absolutely should cause a bit of a price increase.
People may not realize that LS Group had nearly the same revenue as Deere did in 2010 (newest figures I saw), and almost 2.5x what Kubota had. With similar revenues, and lower expenses on things like advertising, they aren't all that disadvantaged.
If you're the Koo family that runs LS Group, and who also founded LG, they can probably manage to have the business survive on much thinner profit margins, in order to take away market share from the big names....then crank up the price later. Sort of like what Kubota did back when they first came here.
How can a company like Hyundai compete with Honda and Toyota in quality at a lower price point? There might still be a slight edge to Toyota or Honda, but even that is highly contested by many experts.