Government incentives and good rain push tractor sales up

The tractor market has started the new financial year with a bang, recording a 19 per cent increase on July 2020 sales figures, the Tractor and Machinery Association of Australia (TMA) reported.

TMA’s executive director, Gary Northover, said the extended and expanded Instant Asset Write-Off scheme, also known as the temporary full expensing incentive, is a major driver in the continued uptick in tractor sales.

“Activity is showing no signs of abating as the Federal Government's temporary full expensing program replaces the Instant Asset Write Off program, giving buyers the ability to write the entire value of their purchase off against this year's profit compared to the $150,000 limit in place to this point,” he said.

“This has clearly appealed to buyers with renowned interest in the larger categories of machine now becoming apparent.

“Against this backdrop, reports from across the country are indicating an outstanding season ahead with abundant rain falling in most regions.”

Numbers are looking great across the country with all states reporting healthy increases in sales numbers.

NSW continues to lead the pack with a 28 per cent jump YOY while Victoria and Queensland both enjoyed healthy increases of 11 per cent and 16 per cent respectively for the month.

Sales in Western Australia rose by eight per cent, South Australia by 25 per cent and Tasmania finished 19 per cent ahead. Lastly, sales in the Northern Territory enjoyed an 11 per cent increase.

With a huge uptick in demand comes supply issues as demonstrated by the latest figures. All but one horsepower category reported a YOY increase in sales – the under-40hp which has always been the best performing category.

The sub-compact range recorded a 17 per cent drop in figures compared to the same time last year, due largely to stock shortages, the TMA reported.

The 40 to 100hp range had a good month with a 20 per cent increase YOY, while the 100 to 200hp category was up 36 per cent.

The large 200hp and above range saw a whopping 138 per cent increase in sales compared to a very quiet July last year, demonstrating the market’s focus from lower horsepower to higher horsepower machines in recent months.   

“This category has been steadily rising as the market prepares for another bumper harvest season and buyers take advantage of the temporary full expensing program to advance their fleet replacement programs,” Northover said.

Sales of combine harvesters have been on a steady recovery over the past year and dealers are reporting strong demand which should be realised over the coming months leading to harvest, the TMA added.

Forecasts are for a return to the 800-unit sales levels not seen for a year or two.

Baler sales were solid in July, up 27 per cent YOY while sales of out-front mowers continued to grow with another 11 per cent rise from last July.

“As we have been highlighting for some months now, the industry is coping with a range of extremes on the supply side at present,” Northover said.

“Machine deliveries continue to be pushed out, particularly in the smaller ranges and price rises for raw materials are beginning to impact the finished product.

“New challenges continue to merge with items ranging from computer chips to tyres now having an impact.”