Pricing edge keeps line on growth track

	The TIG5058 model from Wuyi Zhouyi comes with a 5hp engine that runs on unleaded gasoline.

Power tiller suppliers in China are getting ready for further growth in coming months. Most are anticipating export sales will increase at least 10 percent, similar to the rate in 2009.

Some companies are even projecting a surge of more than 50 percent for 2010, as lingering effects of the economic slowdown keep demand for cost-efficient units on the upswing.

The industry's models range from $100 to $800, making them up to 50 percent less expensive than those from overseas-based competitors. This is in spite of most product specifications, including tilling width, depth and speed, being similar to machines bearing foreign brands. Units generally have a service life of two or three years, and a number of designs can actually last up to five years.

To ensure sales targets are achieved, suppliers intend to keep quotes stable in coming months.

The country's strong automotive industry is expected to sustain low-cost production. Improvements in the sector have made it capable of providing power tiller makers components and parts that allow designs to meet international standards.

Wuyi Zhouyi Mechanical & Electrical Co. Ltd, for instance, offers several machines compliant with CE, EMC, EPA and GS requirements. Engines for such models are sourced from Loncin and Zongshen, two of China's largest suppliers in the line.

The company's releases include TIG5058, a tiller equipped with a 5hp Loncin engine that operates on unleaded gasoline. Featuring 14.2in bolo counter-rotating tines, the machine has a tilling depth adjustable up to 7.1in.

As regards makers' selections, no-frills designs will still be the mainstream amid cost concerns. R&D efforts revolve currently around upgrades that will enable products to meet emission requirements and other regulations in target markets.

To this end, several manufacturers are employing 4-stroke engines in their units. Wuyi Zhouyi and Zhejiang Sanren Machinery Co. Ltd are among those using the technology.

Raising competitiveness further, a number of enterprises are also improving aftersales service. Wuyi Zhouyi, for example, is replacing components free of charge within the 2-year warranty period.

Europe and North America, which account for about 80 percent of exports, are expected to remain the top overseas destinations. There is strong demand for power tillers and other farming equipment in the two regions because of the high degree of mechanization in their agricultural sectors.

In 2009, these markets absorbed roughly 90 percent of Wuyi Zhouyi's and Qingdao J&K Co. Ltd's outbound shipments. At Zhejiang Mader Electric Co. Ltd, models sent to Europe and North America constituted 95 percent of outbound deliveries.

Supplier landscape

	Zhejiang Sanren offers the SR-GT02 model with a 4-stroke engine.

China is home to about 200 power tiller makers, a number of which also offer motorcycles, tools or other types of agricultural equipment. Suppliers congregate in Chongqing and the provinces of Hunan, Hubei, Anhui, Zhejiang, Shandong and Hebei.

The industry can release more than 500,000 machines annually. Output averages 200,000 units, with 60 percent going to the domestic market.

Large companies, or those with revenue exceeding $15 million each year, account for over half of production and exports. Making up roughly 10 percent of the manufacturing pool, these enterprises own factories 50,000sqm or larger in size and employ more than 1,000 people. Their workforces include at least 20 specialists each in R&D and QC.

Midsize suppliers earning between $5 million and $15 million yearly constitute 30 percent of the industry. With up to 1,000 personnel and plants occupying less than 50,000sqm, these enterprises contribute 30 percent to China's power tiller output and overseas shipments.

Taking up the rest of the sector are companies generating no more than $5 million in sales annually. These manufacturers have fewer than 100 workers and their production areas do not go beyond 5,000sqm.