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Another strong month for Tractor Sales



Posted by Mim Monkivitch, 08th November 2020

 

 

October has produced another standout month for tractor sales and continues the very strong trend of 2020.  Sales in the month were up 25% on the same month last year and are now up 22% year to date. This outstanding result sees the full year on track to exceed the 13,000-unit mark for the first time since the 1980’s

Whilst there remains considerable buoyancy in the market off the back of the Instant Asset Write off program and a very strong year for agricultural product, as previously advised, we are beginning to see the impacts of the COVID 19 pandemic on factories and shipping across the globe and this is now impacting supply.

Most dealers are not yet reporting lost business, but many are having to keep a sale by offering an alternative. This situation is likely to continue for the foreseeable future as, not only is factory output down due to social distancing requirements, the number of cargo ships in operation is also down further exacerbating the problem. We estimate that this has added around 12 -16 weeks to most deliveries. In addition, the supply of parts remains challenging and suppliers are being hit with additional freight charges to get parts into their systems

Returning to the October result, activity across the states was again strong with NSW the standout up a whopping 70% on the same time last year and now sitting 34% ahead for the year. Victoria reported a steady month and remains 24% ahead year to date meanwhile Queensland was up 12% to be 13% up for the year.

Western Australia sales picked up 5% on and remains 3% behind last year. Sales in South Australia continue to fly now 36% up YTD, activity in Tasmania remains strong, now 28% ahead for the year.

The increase in sales numbers is again due almost entirely to the ongoing strength in the smaller end of the market supported by the Instant Asset Write off scheme. The under 40hp (30kw) range was up 33% for the month and now sits 29% ahead for the year to date.

The 40 to 100hp (30-75kw) range was again up strongly 41% now 24% ahead for the year.

The 100 to 200hp (75-150kw) category was up 12% and still up 28% for the YTD whilst sales in the large 200 hp (150kw) PLUS range where steady leaving this category 8% behind YTD.

With regards to other products, sales of Combine Harvesters are beginning to improve again. The full year picture is likely to be around 15%-20% up on last year and whilst not nearing record numbers of 800+ units, a figure of 650 -700 is likely.

Baler sales continue their boom, up 21% for the month, remaining up 31% year to date whilst sales of Out – Front Mowers were strong and still 21% ahead of the same time last year.

So, whilst the current La Nina weather pattern being experienced across much of Australia, combined with historically low interest rates are positives, the picture for supply is challenging and is expected to remain so for some time to come.

 

Gary Northover, Executive Director