Covid-driven hobby-farming fad pulls tractor sales higher
Hobby farmers are people who run farms as a hobby rather than a means of making a living.
Korea's exports of tractors totaled $1.1 billion in 2021, according to data provided by the Korea International Trade Association. That is up 53 percent on year and the first time the exports have exceeded $1-billion mark.
They were especially popular in the United States. Korea exported around $797.8 million of tractors to the United States, over half of the total exports, in 2021.
Hobby farming was a trend in North America even before the pandemic. Covid-19 accelerated the growth, as the pandemic forced people to spend more time at home.
Tractor makers in some countries reduced their marketing promotions after the pandemic started, but Korean firms saw it as an opportunity to increase their presence and strengthen their product lineups, said a spokesperson for Daedong, one of the three largest tractor makers in Korea.
Daedong analyzed the patterns of its consumers and found that hobby farmers prefer small- and medium-sized tractors over the bigger ones. So the company released six more models last year alone.
TYM, another tractor manufacturer in Korea, introduced the T25, a small-sized tractor last year. It contributed significantly to profitability, the company said.
"We predicted that demand for tractors would rise as customers would spend more time at home and have more time to garden, and the prediction was right," said a spokesperson for Daedong. "In fact, sales of 100-horsepower and under tractors in North America rose 19 percent on year in 2020, and another 10 percent in 2021."
Daedong reported 33.5 billion won ($28 million) in net profit in 2021, up 60 percent. Its annual revenue came in at 1.18 trillion won, the first time it exceeded the 1-trillion-won mark since its establishment in 1947.
It sold 22,000 tractors and trucks in North America in 2021, nearly double the number it sold in 2019. Sales in the North American market rose 39 percent on year, while it increased 55 percent in Europe, the company explained.
TYM exported a total of 18,000 tractors last year. Around 90 percent of its revenue in the first half of 2021 came from the North American market.
Experts say tractors from Korean companies fall short of global competitors in terms of technology.
"Korea is strong in the IT sector, but in terms of high-level technology that is required in order to develop high value-added agricultural equipment, the country is very under skilled," said Kim Yong-joo, biosystems machinery engineering professor at the Chungnam National University. "Like how Automobili Lamborghini developed tractors, Korean companies should consider cooperating with automakers to develop electric tractors and fuel cell tractors in the long term."
BY SARAH CHEA [firstname.lastname@example.org]