KIOTI EXPECTS TO DOUBLE NUMBER OF DEALERS BY 2018
May 12, 2014
Source: Rural Lifestyle Dealer article by Lynn Woolf, Managing Editor
Kioti acquired its largest number of new dealers in 2013 since becoming a direct distributor for the North American market and realized a sales growth of more than 10% last year. What's behind the growth and what's ahead for Kioti? Rick Snyder, vice president of sales and marketing for Daedong-USA, Kioti Tractor Division, shares background and a look ahead with Rural Lifestyle Dealer.
"Our goal is to double our sales growth over the next 5 years and we hope to double our dealer count. We have more than 300 locations now and our growth expectations are to have approximately 700 dealer locations by 2018," Snyder says.
Snyder says changes in agriculture indicate growing demand for the compact and utility equipment Kioti sells. He acknowledges the trend that production farms are getting larger, but sees opportunity in the small and mid-sized ag segment.
"There are 8 million acres of set aside land coming back into production. This land is not the most fertile for row-crop production, but it's very good for permanent crops, such as hay, grapes, trees and specialty crops. Iowa is an example. The fastest growing crop in Iowa is grapes and there are lots of small wineries popping up in Iowa. The same is occurring throughout the U.S. as well.
"Also, the general economy continues to improve and estate owners and people who have livestock are acquiring or replacing equipment and that will fuel growth in the utility and compact tractor market," Snyder says.
"We've added new products for the light agricultural sector. We're not providing products for those who farm several thousand acres, but these larger farmers still use utility tractors in their operations. As our dealer network continues to grow and expand and as our quality continues to improve, it gives us opportunity," he says.
Kioti Tractor's 2014 lineup includes a new tractor series, expansions to two current series and Tier 4 compliant engines on several models. Read more here.
Snyder says Kioti has a good dealer presence in North America, but still has open areas where they'd like to add dealers. "We expect to further expand throughout the U.S., as well as Canada."
He says eastern Canada has been a good market for the company. "We've grown most rapidly in the eastern provinces where we have a good representation of strong, committed dealers. Our quality product has exceeded expectations. When you compare features, benefits and advantages, our tractors have a high value for the money, they're reliable and almost trouble-free."
Snyder says Kioti's "eco-friendly" tractors offer more advantages for dealers and customers. The new NX utility tractor series and an expanded RX utility tractor series both have the company's new Tier 4 compliant engines. The new model in the CK compact tractor series, the CK2510, will also be Tier 4 compliant.
"Tier 4 initiatives are being driven by government agencies around the globe. Our objective is to exceed those requirements. We take our corporate social responsibility very keenly - to protect the environment for generations to come," Snyder says. "At the same time, there must be power in the machines to enable customers to perform their functions. We've been successful in meeting the emissions requirements and have done it in a fuel-efficient manner. We've taken both sides of that very seriously to deliver the best in class for our environment and our customers."
Enhancing Dealer Support
A major change for 2014 is the completion of an extensive update to its parts warehouse. The company added about 5,000 new part locations after a redesign of the warehouse. Other upgrades included an investment in a carton-flow system, which more than doubled the rate of parts shipped per day, and enhanced packaging better protects products. Kioti says the upgrades have allowed it to improve order-processing time by 50%.
Snyder says its dealer council provided input and they studied other companies' processes. "We looked at successful companies who were rated high in customer satisfaction and looked at ways they were organized and incorporated their best practices. Some were in the ag sector and some were outside, but they were all 'best in class' in terms of customer service," Snyder says.
"Our parts warehouse is allowing us to realize a reduction in downtime for machines. We always encourage dealers to stock adequate parts, but we also realize it's impossible for dealers and for ourselves to stock every part every time," he says. "The feedback we've gotten from dealers is that we have improved substantially, but we're not resting on our laurels. Our successes today will not meet the requirements of tomorrow, so we see it as evolutionary. We're looking forward 5 years from now and looking at our current state and what will be required and building bridges to meet that future state in an effective manner."
Kioti recently launched another initiative that Snyder says dealers can use in their sales discussions, a site focused on explaining Tier 4 technology to consumers, www.kiotitier4.com.
"Dealers can leverage it as an education site for customers who may be familiar with Tier 4, but who may not know what it means for them and their community," Snyder says. Consumers can also use the site to locate a dealer.
"Our top dealers are continuously looking to the future to identify what is happening in the current market and how to adapt to a changing market," he says.
Snyder says that sales are 15-20% higher than last year and is hoping that pace will continue. "We will work to ensure we have the inventory to deliver to customers and we're making the investments to ensure that happens," he says.