Kubota Corp., Asia's largest tractor maker, said China machinery sales may miss their 2009 target because government subsidies for farmers favor domestic makers of agricultural equipment.

Chinese sales of machinery such as tractors and combines may reach ¥40 billion this year, up 48 percent from 2008, Tetsuji Tomita, a senior managing director in charge of the business, said Tuesday in Osaka, where the company is based. Tomita in May said he had expected the sales to double from ¥27 billion.

China this year paid 13 billion yuan ($1.9 billion) in subsidies to farmers who bought agricultural equipment, almost 10 times the amount of previous years, and Kubota was counting on the stimulus to boost its sales, Tomita said.

"The Chinese market is still strong and we gained momentum," Tomita said, adding the government's policy of spending more on products made by domestic manufacturers rather than foreign makers remains "a problem."

The subsidies will probably last for at least a decade as China works to modernize its farming methods, he said.

China sales should continue to grow, helped by the company's introduction of tractors to the market this year, Tomita said.

"I hope they will continue to grow next year but the government can still control the market share through subsidies," he said.

Kubota, which seeks to increase Asian sales outside Japan as growth stagnates in its home market, plans to build a research facility in Bangkok within three years.

The company aims to log ¥300 billion in machinery sales from the region by 2013.

"I'm certain our sales in Asia will increase by double-digit percentage points in the years ahead," he said.

The U.S. tractor market, the world's biggest, is still "pretty bad" and won't recover next year as the recession saps demand, Tomita said. Kubota President Yasuo Masumoto last month said the market "may have hit the bottom."

Tractor sales in the U.S. fell 24 percent from a year earlier in the 11 months that ended November, worse than the estimate for a 15 percent drop for the full year that Tomita gave in an interview in March.

"We are making our business plan for 2010 based on the view that the market won't improve," he said Tuesday.

Global revenue from tractors, Kubota's main business, fell 32 percent to ¥134 billion in the six months that ended Sept. 30.