Sales continue to defy sentiment – supply to be an issue in 2016Posted by Admin, 28th January 2016
The full year of new tractor sales saw an increase across the country of 10% from 2014 – a remarkable result and continues the run of 5 years straight of over 10,000 units sold for the year. The 11,500 units sold in 2015 show the strength of the sector and the ability for farmers and contractors to upgrade their machinery regardless of the seasons. Low interest rates and a need for technology is driving the demand and we see no reason for this to abate in the year ahead.
Combine harvesters ended the year up 16% and on the five year average of 700+ units delivered, while balers and haytools remained steady with round balers making up 65% of the 800 units delivered round Australia in 2015. The dry Summer and drought conditions in parts of the country will drive hay production in those areas that have the season, therefore we are expecting the hay equipment market to remain strong through the 2016 season. The concern of upward pricing pressure given the drop in currency has driven forward ordering at dealerships and although there has been some uplift in pricing, the factories around the world recognise that demand is isolated to certain areas like Australia and that the price increases will have a negative effect on the demand.
Meanwhile the TMA is busy representing our industry at both factory, importer and dealer level by staying across regulators such as the road authorities and OH&S bodies providing information on machinery and how it is used, to ensure any new rules or laws make sense for our industry. Our conference this year promises to be excellent with over 170 delegate attending in 2015 and we are hoping to top 200 this year – save the date 19th July at the MCG. We will have a vast array of speakers looking at our industry with focus on dealers and technology. Skill shortages and training remain at the forefront of issues in our industry with the agricultural sector generally screaming for trained people, and we are staying close with Auto Skills Australia to ensure we are part of any developments in training young people needed for our industry.
2016 looks promising early with many companies reporting string forward ordering for harvesting equipment and tractor demand remaining high in most areas. Our concern is that around the world demand for machinery is low and the factories have cut back production. With Australia only representing 4-5% of global sales, we are concerned that supply may become an issue as demand remains strong – a good problem in most cases as dealers have the chance to move used inventory through the sales cycle to fill demand. Any dealer that has been around for while will have seen this cycle over the years and although not ideal, serves a purpose to clear yards and debt against trades and floor-plans.
We look forward to the year unfolding and looking to the skies for that early break in Autumn to head into a good growing season.