Des Moines Register
02/02/06
Dealer hitches big hopes to little Chinese
tractor
A Bevington man sees possibilities with the growth of small acreages and
hobby farms.
By WILLIAM RYBERG
REGISTER BUSINESS WRITER
B evington, Ia. — As a television camera rolled, farm implement dealer Bill Mayer
throttled up his Chinese-made Foton tractor, pulling a disc behind to churn up the
soil.
The Foton's engine hummed. The disc dug into the dirt. The Foton rolled across
a small farm field next to Mayer Farm Implements, a used-equipment dealership
off Interstate Highway 35 in this tiny community about 15 miles south of Des
Moines.
The action scene and others - with Fotons of various sizes - are destined to
become part of a TV commercial designed to introduce the Chinese-made tractor
to the land of Deere.
Mayer says he's prepared to spend $20,000 to $30,000 on his ad campaign. His
30-second TV commercial will be shown in March.
"We see a market niche here that's got big possibilities," he said.
The Foton is allowing Mayer to dream big in the small-tractor market, which has
been growing along with small acreages and hobby farms. The machines are in
the 20-horsepower to 80-horsepower range, smaller than tractors that do the
heavy work in fields.
Mayer wants to position himself as a national Foton distributor, signing up other
farm equipment dealerships to sell the machines and buy them through him. He
already has deals with a few. He'll send his new TV ad to them to help drum up
sales.
New imports are starting to establish themselves in the farm equipment business,
said Stuart Birrell, an associate professor at Iowa State University. Their
success will depend on how well they are able to create dealer networks to give
customers confidence that parts and service will be available, Birrell said
The tractor also has made Bevington, population 60, one of the newer
destinations in the international trade business.
Jeff Bussanmas, a member of the Bevington City Council, agrees that some
would find that strange. But in today's world, it might not be that unusual.
"Anybody can do international trade. All they have to do is come up with the
connections to do it," Bussanmas said.
Mayer stumbled onto the idea. He met a Chinese businessman through an
acquaintance and began looking into the possibility of exporting used farm
equipment to China.
He flew to China to explore the idea. Once there, his hosts tried to interest him in
selling Chinese tractors in America.
The red-and-white Chinese tractor carries a price tag that, Mayer says, amounts
to "sticker shock in the opposite direction" because it's so low.
A price comparison on 40-horsepower models, according to a Mayer print ad:
• Foton Model 404: $10,900.
• Case-IH Model D-40: $19,240.
• John Deere Model 4120: $23,899.
The price difference between a Foton and a Case "relates to the quality of our
products," Thomas Witom, a Case New Holland spokesman, said in an e-mail.
Mayer says Foton quality is excellent. He said he's been in the equipment
business for 20 years and has worked hard to build the dealership's good
reputation. "I'm sure not going to bring in something that is inferior," Mayer said.
The lower price, he said, can be explained by such things as Chinese wages.
Workers in the Foton factory earn about $1.10 an hour, a good wage in China, he
said. Although reliable data from China don't exist, a 2004 Bureau of Labor
Statistics study estimated the average factory wage in China was 64 cents an
hour.
Mayer's Fotons are shipped from China in containers that arrive by ship on the
West Coast, where they are hoisted ashore onto trucks for the trip to the Iowa
dealership for some final assembly.
Mayer said he sold about a dozen Fotons last year, but the first tractors didn't
arrive until summer, after the spring selling season had passed. This spring,
Mayer will be ready with Fotons on hand and his ad campaign.
Steve Long of rural Colfax and a friend went together last summer to buy a Foton
to share and use on the acreages they own.
"I like it so far," Long said.
Andrew Goodman, executive vice president of the Iowa-Nebraska Equipment
Dealers Association, said the association encourages new companies to bring
their products into Iowa, but advises its members to be sure that foreign
companies have product liability insurance and a registered agent in the United
States.
Mayer said Foton expects to have liability insurance in place by the end of the
month and plans to set up a corporate branch office in Irvine, Calif.