Kubota NA financial income jumps as inventories improve

Kubota Corp.Financing revenues in North America jumped as the Japanese OEM raised prices to deal with ongoing inventory shortages.

According to the company’s earnings supplement, North American financial income for the full year of 2022 was $585.8 million. North American financial income accounted for 68.7% of Kubota’s global financial income, according to Equipment Finance Connect income data analysis.

According to the income statement, global finance receivables reached $3.6 billion, up from $2.8 billion. North America stimulus rates are down $203 million year-over-year due to “significant increases in interest rates in [U.S.]”, – said the executive vice president and general manager of planning and control Masato Yoshikawa at the company’s income statement.

The range is improving, prices are rising

Restrictions in the supply chain have caused production to fall below unsatisfactory demand, President Yuichi Kitao said at the company’s earnings report.

“Due to disruptions in the supply chain, we struggled to procure parts and materials and were unable to maintain sufficient production,” Kitao said. “In the North American and European regions, we were unable to secure enough inventory to meet demand.”

Kubota has raised prices in North America and Europe to combat rising material costs, he said, noting that the OEM plans to continue raising prices this year “in line with market conditions and inflation.”

US dealer inventories are improving, Yoshikawa said, noting that inventories remained at 4.1 months from 3.1 months at the end of the third quarter.

“We acknowledge that dealer stocks of small tractors are generally full, but stocks of mowers, trucks, and especially construction equipment are still small and not yet full,” Yoshikawa said. “Therefore, in 2023, wholesale will continue to outperform retail as a whole.”

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