why is Chinese machinery so cheap??

Searching "why is Chinese machinery so cheap??" reveals several insights, with key points noting the competitive labor costs, manufacturing efficiencies, and the concentrated supply chain network in China contributing to low machinery prices. These factors include substantial government support and subsidies aimed at boosting export growth.

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Dealer Takeaways

• Assess if a low-cost, low-tech tractor line could enhance your business
• Enhance your e-commerce capabilities for nationwide sales
• Ensure your clientele has the ability to conduct self-repairs on tractors

Keno Tractors, a single-store dealership located in Keno, Ore., on California's northern border, carries various tractor lines, such as Branson and Mahindra. However, it is the dealership's range of Chinese-made Jinma tractors that has led to its current success.

As one of only two Jinma dealers in the U.S., CEO Eric Nystrom's journey began when he sold his first piece of farm equipment, a Jinma tractor he imported and assembled himself. The dealership reported $8 million in revenue last year.

Roots in Chinese Ag Equipment

Nystrom's journey as a tractor dealer began with a simple moment: putting his own personal Jinma tractor up for sale. "I was in need of a tractor for my 3 acres, but I didn’t want to spend $20,000,” he recalls. “So, I did some research on Chinese tractors and discovered their basic features were quite appealing. I purchased one from a boat in Washington and assembled it at home, and I was impressed with its value."

Recognizing a similar need in others, he displayed a "For Sale" sign on the tractor and sold it the same day, prompting him to continue buying and selling more Jinma tractors.

Keno Tractors Fast Facts

• 18 years in operation
• Single location in Keno, Ore.
• 10 employees
• $8 million in revenue

Nystrom continued selling Jinma tractors, inadvertently garnering national attention when his nephew created a website for his business. "Suddenly, I was juggling two jobs and working until the early hours," he adds. Eventually, he made the decision to focus solely on selling tractors.

Meeting Emission Requirements

Upon starting his Jinma import business, Nystrom faced competition from over a dozen other companies. However, when new EPA regulations were introduced, many competitors exited the market as the Chinese tractors did not meet Tier 4 requirements. Nystrom opted to replace the engines instead.

By sourcing Perkins engines certified by the EPA and compliant with California Air Resources Board standards, he successfully adapted Jinma tractors for the U.S. market. "If it can sell in California, it can sell anywhere else in the U.S. or Canada," Nystrom explains.

The Jinma 254, a compact 25 horsepower tractor, became a top seller. “It’s perfect for homeowners and can handle a 5-foot roto-tiller or mower,” he adds.

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International Business, Remote Service

Currently, around 7% of Keno Tractors' business comes from their local county, while the rest spreads nationally and internationally. They've successfully sold Jinma tractors to countries such as Guatemala, El Salvador, and Puerto Rico.

These tractors feature straightforward technology, making them easy to support remotely. "If a customer encounters an issue, we can ship them the necessary part and get them back to work," he notes. "Our business model is primarily sales-driven and internet-focused, allowing us to reach a global market."

With a solid e-commerce platform, Keno Tractors facilitates worldwide shipping of Jinma parts. "There is a vast population of Jinma tractors out there that we didn’t sell, and we have the capability to fix them all," he insists. They also provide rebuilt engines for Jinma owners.

Current Problems with Shipping, Taxes

Nystrom currently deals with the challenges of increased shipping costs and tariffs affecting Chinese products, which has temporarily halted Jinma tractor imports. "The latest model, the JM-284 featuring a hydrostatic transmission, is on my radar, but the inflated costs deter me," he admits. "Bringing one in now would mean selling it at a higher price than Branson or Mahindra tractors."

Nystrom is hopeful that shipping costs will eventually decrease but acknowledges they will not revert to previous low levels. Recently, he faced a staggering shipping bill: $22,500 for a 40-foot container, compared to a previous cost of $3,400.

As a consequence of these challenges, Keno Tractors observed a drop in Jinma sales in 2021, with more customers opting for Mahindra and Branson tractors instead. He notes that their business model revolves around volume sales, which enables competitive pricing.

Advice for Dealers Looking at Chinese Tractors

Nystrom has previous experience setting up other Jinma dealers, primarily small shops supplied with inventory and parts. However, the introduction of Tier 4 regulations created obstacles for the dealer program. "Traditional dealerships with OEM tractor lines often found it hard to market Jinma against their own offerings," he states.

Potential Jinma dealers must be prepared for the commitment required to assemble tractors, investing approximately 8-10 hours into each unit. "Identifying the right customer is crucial, usually homeowners seeking minimal maintenance," adds Nystrom. "If a contractor is interested, I'd recommend Branson or Mahindra for better warranties and financing options.”

Price remains a critical consideration. Previously, a 25 horsepower Jinma with a front-end loader sold for $8,900, making it profitable; Keno Tractors once achieved sales of 54 in a single month. Presently, the base model Jinma 254 is listed at $11,900.

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