Brand loyalty tested as machinery stock issues continue

Sales of new tractors in May went up by 12 per cent on the same month last year and now sit six per cent behind for the 2022 year-to-date, according to the Tractor and Machinery Association of Australia's (TMA) latest monthly report.

The organisation said the strong result was largely due to improvements in tractor deliveries following months of poor supply.

“The prevailing theme in the market appears to be if you have the stock, you will get the sale,” said TMA executive director, Gary Northover.

“This is testing customers' brand loyalty more now than at any time in recent memory, particularly in the small to mid-range tractors,” he said.

“Underlying demand for Agricultural Machines remains very strong, not just locally but worldwide.”

Due to the buoyant market and existing government tax incentives such as the Temporary Full Expensing Program, which is set to run until June 2023, demand for agriculture machinery is not waning anytime soon, Northover said.

“Dealers are reporting plentiful order books but continue to struggle with supply,” he said.

“As we reported last month, price rises are continuing and it would seem that many of these appear to be baked in, most notably relating to shipping costs.

“Industry experts advise that the introduction of ever more stringent regulations (not just environmental) is leading to cost increases that are having to be passed on.”

May sales results were strong across the country with NSW up 10 per cent following several slow months, to now sit nine per cent behind last year. Queensland was up 16 per cent to be three per cent ahead year to date while Victoria was 14 per cent up on last May due mainly to supply of small hp units and is now in line with last year.

Sales in Western Australia recorded a huge lift with the arrival of large hp machines, up 26 per cent  for the month but still 18 per cent off YTD. South Australia dropped 14 per cent while Tasmania was up 17 per cent. Finally, sales into the Northern Territory were up 89 per cent.

Sales in all horsepower categories also picked up, with the larger tractors recording the biggest improvement due to improved supply. The category (200hp and over) was up 27 per cent compared to the same last year, albeit still 25 per cent off YTD.  

The under-40hp category was up strongly by 14 per cent to be one per cent ahead  YTD, while the 40 to 100hp range was up 11 per cent compared to this time last year to remain four per cent ahead YTD. The 100 to 200hp category was up for the first time in some time, six per cent ahead in May to be 10 per cent behind YTD.

Combine harvester sales have started to come in and the TMA is expecting another flourishing year for the category, with another 1000+ units expected to be sold this year as the renewal of fleets depleted by the drought continues.

In contrast, the outlook for balers remains subdued as the hay season is yet to get going, the TMA reported. Bales sales were 20 per cent down in May compared with this time last year.

Sales of out-front mowers were also 24 per cent down YOY.