The majority of used tractors in the US and around the world originate from China. Because American farmers cannot get their hands on new or domestically manufactured parts, they are forced to buy them online, directly from China.
For years now, Chinese tractor companies have been investing more into modernizing their production lines in order to meet the demands for parts. Some companies now produce American-style brands such as Farm Pro and John Deere. However, there is still a large market in selling imported Chinese parts to American buyers because of the quality and price difference.
This demand is met by a thriving Chinese parts business, run mainly from Beijing. The parts are transported to America mainly by sea containers, which means that the cargo ships have to sail for about 30 days across the Pacific Ocean until they arrive at their destination.
“There is basically no other way than sending them via sea because air freight is extremely expensive,” says Liu Yongjing of Beijing-based company Sino-Agri Trade.
“It is easy for me to sell tons of products to American buyers, but it’s really impossible for me do the same in China because of the tight competition here,” he adds.
The fact that Chinese-made parts can be sold much more easily in America than domestically is a result of the high tariffs imposed on foreign parts by federal authorities. For more specialized tractor manufacturers, like Jimna tractor parts, often need to be ordered directly in the US.
On one hand, American farmers benefit from this because they gain access to cheaper parts. However, the Chinese companies that produce these parts suffer as a result of the low demand at home and the loss of potential revenue.
“We set up our factory in America instead of exporting parts to China because it is much more profitable for us,” says Jack, a manager from Munich Machinery, an American company that manufactures giant bulldozers. “There are many factories here in the US that manufacture small tractors, so we can provide customers with after-sale services. We can even sell our spare parts to American buyers.”
“We are still expanding our business in the US because that is where the money is,” adds Jack, who asked not to be identified by his real name. “But it’s really hard for us to find distributors in China due to the fierce competition.”
The lack of demand for Chinese parts in the domestic market, the high tariff on foreign parts, and the popularity of expensive American tractors are all major factors that help to shape China’s tractor industry. I don’t see that changing anytime soon.