Spring is auction season, but it’s also when grey market tractors show up, two to three at a time at auctions across the Prairies.
Grey market tractors are built for agriculture in other countries and shipped to Canada.
They aren’t illegal but may have tires designed for rice fields, no rollover protection, no power take-off shields, safety stickers in Japanese or speed controls that are opposite of Canadian tractors. More importantly, they aren’t supported by Canadian dealers and warranties.
Rick Smelquist is general manager of Camrose Dynamic, which sells Kubota tractors, a common grey market tractor.
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He said it’s not uncommon to receive 10 to 15 calls to his dealership before auction sales from buyers wanting to know the value of the tractors.
Smelquist makes it clear – a grey market Kubota tractor is not the same as a Kubota tractor sold by dealers.
“It’s a real bugaboo for Kubota dealers in Canada,” said Smelquist, who estimates 75 to 80 percent of grey market tractor buyers don’t know the difference until it’s too late.
“It’s a very passionate subject with me with people being misled and not getting what they paid for,” Smelquist said.
Trouble usually begins when an irate buyer wants parts or warranty coverage for a tractor he thought was the same as he could buy at a local dealership.
“Even with the phone calls there are people making that mistake and buying them,” Smelquist said.
The websites for Kubota and Yanmar tractors warn buyers that they don’t service grey market equipment.
Alberta farmers’ advocate Jim Kiss said his office receives complaints when buyers get a lemon, can’t find parts and don’t understand why dealers aren’t interested in servicing the tractors.
“Maybe you can get one quite a bit cheaper, but after that you’re on your own,” he said.
In Alberta, only equipment bought through a licensed dealer is covered under the Farm Implement Act. Equipment bought through the internet, farm auction or out of province is not covered by the act.
Brian Glenn, manager of Ritchie Brothers auctions in Edmonton, said it’s not up to his company to block the sale of grey market equipment at its auctions.
“It’s used equipment. Buyer beware,” he said. “Most people are fairly educated about the process before they buy the equipment.”
Howard Mains, policy adviser for the Association of Equipment Manufacturers, said the organization has asked the federal government for more than a year to stop imports of grey market equipment.
“We’ll keep asking. I think all owners and operators want to be assured equipment is up to North American standards and it can be serviced,” Mains said.
“It remains a concern because we continue to see grey market equipment, in particular small tractors, offered at auction sales.”
Acreage owners and farmers who need small tractors are the main targets for grey market equipment, Mains said. The smaller tractors, usually less than 50 horsepower, are shipped to Vancouver in containers from Japan or South Korea and end up for sale at farm auctions and on the internet.
The American government blocked the sale of grey market equipment in 1997 after a 1996 court ruling.
Richard Weiss of Good Used Tractors.com said he has sold more than 500 grey market tractors in eight years with no trouble and continues to sell eight to 10 a month.
“I’ve not had anyone ever come back to me and say they’ve not been able to get parts. People call me back and praise me how good the tractors are.”
Weiss said some of the tractors belonged to Japanese farmers but could no longer pass that country’s strict emission standards because of their age.
Most of the tractors he receives in his shipments have a North American equivalent but some are sold only in Japan and are more difficult to service.
“I’ll place those in Ritchie Brothers or Michener Allen.”
Weiss said his customers include farmers who want a small tractor to clean their calf sheds or a good used tractor for tillage.
“Usually the people with the tight pocketbook come to me and people with the large pocketbook go to Kubota dealers.”
He maintains that parts are not difficult to obtain if the owner or dealer can get the corresponding cross-over number.
