LS

■ No advance payment required, reducing burden of purchasing cost 
■ Farmers who have reached government-supported loan limit can purchase tractors through leases 
■ Amount excluding residual value of tractor repaid, decreasing maintenance costs 
■ CEO Shin Chai-ho, “We hope many farmers will experience the convenience and improved profits provided the LS autonomous tractor.”

LS Mtron (CEO: Shin Chai-ho), an LG Group subsidiary specializing in industrial machinery and high-tech parts, announced on the 7th that it would implement an autonomous tractor lease program, the first in Korea, by the end of this year. This is a promotional program aimed at helping more farmers use autonomous tractors by reducing the purchasing burden. 

In general, when purchasing tractors with a government-supported loan,  farmers must pay a set amount of the initial cost. As the loan support applies to only one tractor, farmers cannot use it for an additional tractor purchase. However, with the LS autonomous tractor lease program, customers can operate tractors without having to make an advance payment. As the program is operated by DLL, a global company providing financial solutions for agricultural machinery, even farmers who have reached the limit of government-supported loans can use additional tractors.

Guaranteeing the residual value of the tractor (fair market value lease (FMV)) is another key benefit of this program. The residual value is guaranteed at 48% (3 years), 44% (4 years) or 40% (5 years) of the principal, depending on the period of the lease. Twice a year, customers repay an amount of the lease principal excluding the residual value. As the repayment amount excludes the machine’s residual value, maintenance costs are relatively lower. For example, if the initial lease period is five years, the residual value is 40%. Therefore, the customer makes a repayment on 60% of the principle ten times, twice each year, over the five-year period. 

When the initial lease period ends, the customer can either return or take over the tractor. The tractor can also be re-leased for up to seven years including the initial lease period. If the initial lease period is five years, the customer can re-lease the tractors for two years based on the machines’ residual value. When the re-lease period is complete, ownership of the tractor is transferred to the customer.

The LS autonomous tractor lease program has been implemented for four models, the MT7.115 SMARTREK 3.5, MT7.115 SMARTREK 3.0, MT7.74 SMARTREK 3.5 and MT7.74 SMARTREK 3.0. Level 3.5 tractors are models with obstacle detection and emergency stop functions on top of the automated driving and operation functions of level 3.0 models.

In 2021, LS Mtron became the first company in Korea to commercialize autonomous tractors. Once an operating route is selected, the tractor automatically drives and conducts operations, thereby lowering the user’s fatigue level. With the application of a real-time kinematic global navigation satellite system (RTK-GNSS), the autonomous tractor has the highest precision in Korea with stationary and operating errors below 2 cm and 7 cm, respectively. It can also reduce cultivation time and increase yields by minimizing redundant operation areas. The results of a test conducted on onion farming indicated that the cultivation time was reduced by 25% and the yield was increased by 7% in comparison to manual work. Based on an area of farmland measuring approximately 20,000 m2, an additional profit of around KRW 2.5 million can be generated. LS Mtron is the only company in Korea that sells level 3.5 tractors with obstacle detection and emergency stop functions, which are key technologies for fully autonomous tractors.

“Our customers will be able to enjoy convenient use of autonomous tractors with the LS autonomous tractor lease program, which does not require an advance payment and guarantees the residual value of the tractor,” said LS Mtron CEO Shin Chai-ho. “We hope many farmers will experience the convenience and improved profits provided by the LS autonomous tractor.”