RCO Tractor has locations in Austin and Greenville, Texas.
Brothers Stuart & John Ryan started RCO Tractor in 2003 and built the dealership up to 2 locations by importing used tractors from Japan and reconditioning them for sale in the U.S. RCO has locations in Austin and Greenville, Texas.
John Ryan explains, “My brother Stuart stumbled upon the opportunity to import those tractors. There were huge numbers of good condition, low-hour tractors available in Japan. The favorable exchange rates and lower transportation costs added up to a proposition where we could sell compact and sub-compact 4WD tractors with loader & warranty in the $6,000-$10,000 range. This was a very attractive option for those who wanted to step up to buying a tractor, but didn’t want to become an amateur mechanic, and couldn’t stomach new tractor prices. We worked with a group of reputable import and reconditioning businesses and made sure the tractors met OSHA specifications. That was not the case with the ‘gray market’ in general. Some companies were rolling back hour meters and doing all kinds of sketchy stuff.
“The rest of the world woke up to the opportunities, so there became increased competition for the better units. Yanmar and Kubota started making moves to protect their names and so it was a natural progression for us,” he says, regarding the move to taking on a new line in 2010. “LS Tractor came along for us at the right time.”
LS Tractor is based in South Korea and established its U.S. headquarters in Battleboro, N.C., in 2009. It recently earned the North American Equipment Dealers Assn.'s Dealer's Choice Award for tractor manufacturers, (Go here to read an interview with Deryk Johannes, chief executive officer of LS Tractor.)
Choosing a Partner
Ryan explains why LS Tractor was a match for his company. “We had done due diligence on the machines and knew how well they were made, but we had to make a call on what sort of business partner they would be. In short, LS has exceeded all of our hopes & expectations. They are a small, lean company and it meshed with ours,” Ryan says. “There is no bureaucracy over there. People throughout the organization are empowered to make decisions and run whatever aspect of the business they are responsible for. We can call someone on the phone and immediately they can answer our questions or bring a resolution.”
Serving the Market
Ryan says that today they support the entire LS Tractor line. About 80% of their sales are in the 30-50 horsepower range. “Early on, people were more attracted to the price points, but in the last 2 years, we’ve seen a shift. The XG series (lower priced models) make up a smaller percentage of our sales. Now, we’re selling more of the premium XR models,” Ryan says. The XR models are offered in 40-55 horsepower with options for open station or cab versions and mechanical or hydrostatic transmissions.
He says the company’s brand awareness is growing, but there is more work to be done. “I wouldn’t write off the brand recognition challenge completely. It’s better than it was 5 years ago, but there is still a lot of room for improvement,” Ryan says. “That’s the main challenge. The product is good and the delivery and logistics are really well organized. We can order a truckload and they show up in a week. We’re not getting pressured in October to look into a crystal ball and put 9 months of tractors in our inventory before the end of the year.”
Watching the Economy
Ryan says the market has responded to the price points of LS, especially related to new Tier 4 models. “They were much better prepared than other manufacturers and had Tier 4 models out on the market early and they were not super overpriced because of the new technology.”
Ryan says the rural lifestyle market is strong now, but he is watching for any signs of a downturn. “We’re just watching to make sure the economy stays healthy, so a lot of people keep buying properties and buying tractors.”