We sat down “virtually” with Peter Dong-Kyun Kim, president of Daedong-USA, Inc. KIOTI Tractor Division, to discuss tractors – especially compacts, and how demand for them has continued even through the pandemic. In addition, he takes us through how the company has broadened its OPE product offerings and the development of its first-generation of compact construction equipment, scheduled to reach the market next year.
OPEB: How has the compact tractor business been overall? Did it grow in 2020?
Despite the unexpected challenges presented by the pandemic, the compact tractor industry saw a surge in demand in 2020 that has continued into 2021. After a brief period of unpredictability as Covid-19 began to spread across North America, it soon became clear that demand for compact tractors was going to surge. This trend can be attributed, in part, to the fact that many consumers who were considering a compact tractor for personal use – whether it be an upgrade to their current model or a first-time investment – decided to make the purchase in 2020. With people staying close to home, 2020 presented an opportunity for landowners to tackle long-awaited projects on their properties that call for a compact tractor.
Additionally, more people began calling rural areas home in 2020. Increasingly, people are deciding to move away from expensive, densely populated urban cities to migrate to rural communities, driving the need for equipment to manage their land.
Lastly, many using compact tractors every day are those providing essential services that keep our communities and economy running. From agriculture to construction industries, essential workers are empowered by compact tractors to get the job done, and those industries don’t stop in a pandemic. These combined factors led to a strong 2020 for the compact tractor market, and that demand is continuing this year.
OPEB: How was 2020 for Kioti’s compact tractor sales given Covid-19 and the challenges dealers faced?
Kioti had a very successful 2020 across all product lines, including compact tractors. The need for product from all customer segments, led by rural lifestylers, played a significant factor in our 2020 sales. Kioti grew in market share across tractor horsepower categories in 2020, and Kioti dealership retail sales far exceeded our expectations for the year.
Throughout 2020, Kioti continued to introduce new, innovative compact tractors that incorporated dealer and customer feedback while staying focused on the quality and value we are known for. We launched the new CX Series that provides a compact and capable machine that’s easy to use, comfortable to operate and extremely durable. We also added new models to our popular CS and CK10SE Series, giving customers additional horsepower options and added features to these top-selling products. Overall, the industry-wide demand for compact tractors and Kioti’s new, innovative models were reflected in our 2020 sales.
OPEB: What about inventory issues – can dealers expect to see the product stream they’re used to, or are there some hiccups?
Kioti entered 2020 with a significant increase in production to support strong projected growth for the coming year. Despite the healthy increase, we quickly realized the need to ramp up production even further to meet the demand for compact tractors as it surged in mid-2020, far surpassing industry projections. These inventory challenges impacted our industry and many others as well.
Kioti has been working tirelessly to minimize the impacts that this unprecedented demand has on our inventory levels to proactively support our dealer channels. As we recognized retail momentum building, we significantly increased our factory production last summer. The factories supplying our tractors remained open continuously, even in the midst of the pandemic, to support the growth of our dealers. We also proactively worked with suppliers worldwide to increase availability of component inventory for current and future production. We’ve been utilizing a systematic approach to allocate increased levels of inbound inventory to provide all dealers with the inventory they need as rapidly and equitably as possible.
As the world’s economies have begun to reopen, we’ve seen a new set of challenges emerge in the form of transportation times, costs and port efficiencies. Kioti will continue to adapt to overcome these challenges because excellent service to our customers is foundational to Kioti, and we are striving to ensure our inventory delivery meets these standards.
OPEB: What’s hot and innovative when it comes to Kioti’s latest tractor models?
Kioti couldn’t be more excited about the broad array of compact tractors we have coming to market in 2021. From updated models to all-new product lines, these tractors demonstrate our commitment to taking customer and dealer feedback seriously as we develop new products that prioritize end-users’ needs.
The forthcoming NS Series of tractors was designed to meet the needs of value-conscious customers who require a powerful tractor with a larger platform. The series will include five models, with engines ranging from 45- to 58-horsepower. All models will feature high-capacity hydraulics and power steering, with options for synchro shuttle or HST transmissions.
Kioti is also adding a new model to the popular CX Series that launched last year. Featuring a 24.5-horsepower engine, dual-pedal hydrostatic transmission, heated and cooled factory-installed cab, premium suspension seat and rear remote valves standard, the CX2510CH will offer both comfort and convenience to any operator. Customers who already own or are considering a CS20 Series tractor will soon be able to add a field-option cab with exciting features like forced air heat, windshield wipers with windshield washing capability, front work lights, turn signals with side clearance lights, side view mirrors, opening front and rear windows and an optional Bluetooth audio player. Kioti’s new line of grapple attachments – with three different models ranging from 48 to 72 inches and weights ranging from only 198 to 476 pounds – should have started shipping to Kioti dealerships as you’re reading this.
And our additions don’t stop with compact tractors: We’re also introducing the Kioti K9 2400 Cab, expected to hit the market in Q4 2021. With a deluxe, factory-installed cab, this K9 will offer operators an audio system with speakers, air conditioning, heat and defrost, a tilt-opening windshield and four-wheel drive. The utility vehicle is also designed with advancements to reduce vibration and noise in addition to a redesigned CVT with engine braking capabilities.
We’re especially excited to be developing Kioti’s first-ever compact construction equipment, slated to hit the market in 2022. Kioti’s skid steer and compact track loaders will allow our broad dealer network to expand their offerings and will mark Kioti’s entrance to the compact construction market.
Altogether, Kioti’s new product offerings for 2021 are designed to meet the specific and changing needs of our customers. By providing comfort and ease-of-use without sacrificing quality or value, Kioti understands what today’s tractor customers are looking for. We can’t wait to see these products reach our customers, and, ultimately, the dirt where they belong.
OPEB: Anything else you’d like to add?
Kioti has been serving the North American market for more than 35 years, and we maintain a long-term growth strategy of supporting dealers with strong internal management and business expertise while prioritizing the wants and needs of our customers. Over the past several years, Kioti has made significant investments in production and infrastructure as we continue to expand our footprint across the United States and Canada.
In late 2019, for instance, Kioti completed a $13 million renovation and expansion of our North American headquarters office space and distribution center, including a state-of-the-art training facility for dealers. Once circumstances safely allow, the facility will host Kioti University professional development sessions several times each year. Kioti has also launched an online learning management system, housing easily accessible training programs for dealers and technicians to continue developing their skills in real time.
Kioti has been a go-to manufacturer for quality compact tractors for decades. We’re excited to see longstanding customers alongside new ones increasingly turn to Kioti for their turf care and utility vehicle needs. We’re also eager to provide additional products to support our dealers and their compact construction customers. As our offerings expand, our commitment to quality, value and service remain the same. We’re looking forward to what’s ahead for the company, our dealers and our customers in 2021 and beyond.
This article first appeared in the September 2021 issue of OPE Business.