Equipment manufacturer Kubota has instituted a policy that limits the number of stores one dealer can own in a state.
The policy took effect May 17, according to a memo to dealers, as first reported by Ag Equipment Intelligence on May 15.
Kubota dealerships stood out as a potential target for equipment dealer consolidation, Pat Albero, partner of the equipment and commercial truck divisions at Performance Brokerage Services, previously told Equipment Finance News.
This year, Bob Howard Luxury Auto Group acquired Lakewood, Colo.-based Kubota dealer Universal Tractor, and Linder Industrial Machinery Co. acquired Georgia-based Kubota dealer Southern Tractor & Outdoors.
Kubota developed the policy to better ensure the local dealership experience for customers, the company said today in a statement to EFN.
“Kubota Tractor Corp. continuously evaluates its dealer network to ensure Kubota dealers are positioned as the local dealer of choice in every community by providing the best product selection, pricing, and overall experience for existing and prospective Kubota customers,” the company said.
“To foster healthy competition in the industry, Kubota is in favor of a balanced approach which allows for managed growth by dealer owners, while also requiring reasonable limits on the concentration of ownership at a state level. Our dealers will be the first to learn of any further developments on this matter.”
Kubota’s U.S. sales slump
The news comes as Kubota’s first-quarter U.S. retail equipment sales declined in all categories except skid steers, with low-horsepower tractors, 40 horsepower and under, declining 17% year over year, according to the company’s Q1 earnings supplement.
The residential market’s stagnation in North America is a continuing problem for Kubota, according to the company’s quarterly report, released May 15.
“In North America, the company struggled with tractor business due to continuous stagnation of residential market and crop prices decline although sales of construction machinery were solid thanks to the demand of housing construction and infrastructure development,” according to the report.
This is a developing story.
