Kubota To Open $90M Parts Center in Kansas

Kinda big news here.

Kubota just announced plans today (Sept. 23, 2017) to spend nearly $10 Billion Yen ($90M U.S) to build a new logistics hub in Kansas to deliver repair parts for agricultural equipment as soon as the next day beginning in 2019. For more details on the story click here: https://asia.nikkei.com/Business/Companies/Japan-s-Kubota-to-open-90m-logistics-center-in-US-Midwest?n_cid=NARAN012



This is quite interesting, and an exceeding smart move I think. From where I sit, compiling auction sale price data on all types of used farm and construction equipment for almost 28 years now, I have been noticing something, a data trend, for the past couple years.

Used Kubota tractors are holding their value very well. Auction sale prices are the cold hard facts. Put an item up for sale, market tells you the value, up or down. The orange tractors starting with "K" have been selling well.

Now of course Kubota's sweet spot on the tractor side of the biz has been in the Under 100 HP segment, drifting into the higher HP segment more recently. The past two years the smaller HP segment has seen stronger new tractor sales and has also seen, as our Machinery Pete auction sale price data shows, used values holding at a higher level vs. higher HP used tractor models. Further proof of the "Smaller HP is Hotter" trend is witnessed by search traffic data to the 100,000 used farm equipment dealer listings at our http://www.machinerypete.com web site. For example the past two months we've seen 52% more farmer searches on used 100-174 HP Tractors vs. 175 plus HP Tractors.

Now Kubota is planning to up their game on the parts side of the biz. Customer support is King. My guess is this investment will be noticed in farm country. Certainly a nice touch to build the plant in the heartland of the U.S., in Kansas.

Kubota is of course also aggressively moving into other sectors of the farm equipment biz. Their purchase of Great Plains for $430M in May of 2016 got them into the Tillage and Planting biz.

What's left....Large HP Tractors? Combines? Stay tuned.