Small Tractor Market In Upheaval

Maker of Montana tractors goes on own, Montana signs agreement with Branson and Kukje industries to keep show rooms full.

Published on: Oct 21, 2009

"There are times I go to the office and pick up the phone just to hear if there's still a dial tone," says one tractor salesman from Florida. He says the silence has been deafening in his office since late in 2007 -- when a booming compact and sub-compact tractor market downshifted to neutral.

 

The problem for my friend in Florida actually runs downhill from further up as a number of distributors and manufacturers of small tractors vie for profitability in a down market with treaties, agreements and talks of mergers.

 

Walk through the grounds of the SunBelt Ag Expo and you'll find a new line of Korean-built tractors from tiny to 88 horsepower being marketed by LS Tractors USA. LS had been making tractors for Montana, McCormick, Taff and FarmTrac until earlier this year when company principals decided to jump in the market themselves. LS is now a brand of its own with blue paint, 5-year warranties and competitive prices.

 

The move left Montana with a big hole in its offerings, a hole that was filled earlier this week with an agreement with Kukje Machinery Co., LTD -- the maker of Montana-s rival Branson Tractors -- and Branson itself, that will allow Montana access to Kukje's brand of equipment. And, as evidence of the move, the usually-green Montana tractors at Sunbelt are Branson Red and sport the Montana brand. The new red Montanas will be available to dealers later in October.

 

The access agreement is fact. The talks of mergers are harder to pin down.

 

In June, the leaders of Branson, Montana and Kukje signed a letter of intent to form a joint venture to market tractors in North America. Contacts from Branson and Montana at SunBelt say many expect hard facts on those talks by the end of the first quarter of 2010.

 

We spoke with Montana's Roger Kretchmer, vice president of sales and marketing, who said things are still in flux, but the access agreement could lead to a single line of Kukje tractors bearing the Montana name by mid-2010 -- a turn that would leave the future of the Branson brand in doubt. He wouldn't comment on how dealer networks might be merged.

 

Across the showground, Glenn Ezell, Branson sales manager, based in Rome, Ga., talked only of the merger as a decision for the "principals of Branson, Montana and Kukje."

 

"What will come of all t his is anyone's guess," he explains.