Buhler partners with Japanese competitor

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This article was published 18/03/2019 (2382 days ago), so information in it may no longer be current.

Winnipeg-based Buhler Industries Inc. — makers of the Versatile brand large-horsepower tractors — has started making a new line of larger tractors for the Japanese equipment maker, Kubota Corp.

With the newly designed production line, Buhler will also start producing a range of its own smaller Versatile tractors.

Adam Reid, Buhler’s vice-president of sales and marketing, said the company is still evaluating the resources necessary to handle the additional volume, but is not anticipating the need to staff up dramatically in the short term. The company employs about 400 people at its Fort Garry plant.

Officials from Kubota and Buhler were close-lipped about details of the new tractor Buhler will be making for Kubota, other than to say they will be bigger than Kubota’s current largest model, which is 170 horsepower.

Kubota Canada’s vice-president of sales and marketing, Yannick Montagano, said the intention is to launch the new line in the second half of this year.

“Kubota was looking for a partner to accelerate the R&D process for this new tractor line,” Montagano said. “There are not too many other companies out there manufacturing tractors as large as this. So this was considered to be a good fit, considering that Buhler had an interest to go down the horsepower range in their case.”

Buhler’s Versatile plant has undertaken other similar contract-manufacturing arrangements in the past, making tractors for varying lengths of time for the likes of Caterpillar and Fiat.

No financial details were disclosed, but the two sides said the agreement, which was about five years in the making, is a “long-term” arrangement.

Reid said it it likely the two tractors will share similar supply chains for the input parts for the tractors, and while there will be differences between the two, there will also be significant similarities.

Montagano said while Buhler and Kubota engineers collaborated on the design and development of the new tractor series, “they will have the Kubota DNA,” he said. “They will be different than Versatile’s tractors in the same horsepower range that will be coming off the same line.”

But it seems likely the two tractors will also have many similarities.

Asked about the competitive scenario that the two companies will face with new tractor models entering the market with a number of similarities, Reid said it will be left to the market to decide what they prefer.

“We have structured our programs and pricing to be very much along the same lines,” Reid said. “It is anticipated that it will be a choice left to dealers and customers… based on a multitude of factors, including the buying experience in the past, where they think they will get the best service, what dealer network they prefer…”

While Kubota’s largest tractor currently on the market is 170 horsepower, Buhler’s smallest is 265 horsepower. The new production line, which will be producing about six new models of a smaller Versatile tractor along with the new Kubota models, will build tractors that are in the range of 170 to 365 horsepower.

The Kubota ones will be at the lower end of that range.

“We are thrilled to have entered into this partnership with Buhler, which is allowing us to accelerate our entry into the higher horsepower tractor segment,” Montagano said.

The company, based in Osaka, Japan, has a broad range of product offerings with manufacturing facilities around the world, and over the past few years, made a couple of large acquisitions of tractor-implement manufacturers in Kansas and Norway, which will enhance its new large tractor offering.

It will be the first time Kubota has undertaken any manufacturing in Canada.

Reid said the new Versatile models will allow it to access new markets that its larger tractors had previously excluded the company from competing in.

Buhler Industries is coming off a tough year, with revenue down close to eight per cent in 2018 and first-quarter revenue this year down 23 per cent.

The company, which is majority owned by Russian farm equipment maker Rostselmash since 2007, has made a number of changes in its senior management team over the past several months, including the appointment of Marat Nogerov as its new CEO last fall.

 

martin.cash@freepress.mb.ca