Expect Kubota to Face Headwinds After Pandemic-Driven Tractor Boom Until First Half of 2024

Kubota continues to strengthen its high-end compact farm and construction equipment offering for small agriculture and residential/lawn-mowing in its core markets. In its largest market by sales, North America, the company has established itself as the market leader and pioneer with subcompact tractors (under 40 horsepower) since forming its first overseas tractor distribution company in 1972. In Asia, the company utilizes its strength with rice farming machinery and has the leading tractor and crawler combine harvester shares in Japan and ASEAN regions. Further, on the construction side, the company has held the leading global share in mini-excavators for about two decades and has the second-highest share in compact track loaders in North America. We expect the company to utilize its developmental capability with small-size machinery, brand, and vast dealer network to capitalize on further demand.