Utility tractor sales soar as demand for over 200hp dips

The Government’s Instant asset write off incentive continues to push sales of smaller tractors

Tractor sales in Australia have continued on a strong upwards trajectory, with July 2020 numbers 24 per cent higher than the same time last year, and now 21 per cent ahead year-to-date (YTD).

This comes off the back of an extraordinary month in June, which was also the best month for tractor sales in 20 years, with over 2000 new tractors sold in that month alone.

“With lockdowns relating to the COVID-19 pandemic easing in most states, there is a sense of getting back to work amongst tractor buyers,” said TMA executive director, Gary Northover.

Compared to June when all states recorded a good increase in sales, July was a bit of a mixed bag. NSW once again led the way with a whopping 60 per cent increase on the same time last year and now sitting 26 per cent ahead for the year.

Victoria reported another strong month, up 34 per cent and now sitting 30 per cent ahead year to date, despite stricter restrictions due to the pandemic. However, the Victorian state government has continued to deem agriculture an ‘essential’ industry during COVID-19, therefore permitting the industry and associated services to operate with little to no restrictions.

Queensland experienced its first dip in some months, down seven per cent YOY but still 14 per cent up YTD.

Western Australia picked up five per cent YOY and now remains three per cent behind last year.

Sales in South Australia held strong, now 32 per cent up YTD, while Tasmania continues to flourish - up 17 per cent for the month and now 24 per cent ahead for the year.

In regards to the horsepower categories, TMA reported that the increase in sales numbers have been largely across the smaller end of the market, which is supported by the Instant Asset Write off scheme.

The under 40hp range was up 48 per cent for the month and now sits 20 per cent ahead YTD.

The 40 to 100hp sector was again up strongly 29 per cent YOY, now 21 per cent ahead YTD.

The 100 to 200hp category also did well with sales up six per cent from last July, and 36 per cent up YTD.

“The strength in the horticultural space is having a big impact on demand for this range strongly supported by the financial incentives in place,” Northover explained.

Meanwhile, sales in the over 200hp range did not fare as well, recording a seven per cent drop YOY and now sitting seven per cent behind YTD.

“Demand for large tractors is being impacted by a range of factors including the persistent drought in regions within Northern NSW and Southern Queensland, the ongoing challenges being felt in some of the key markets serviced by this product such as the cotton industry, and a sense that utilisation levels of the past few years may not have yet warranted large scale fleet replacements,” Northover said.

He said the industry’s ability to continue delivering strong sales will be determined by the supply of product from international suppliers. He added that market demand so far is largely being met.

“Further complicating this is the imposition of Stage 4 restrictions in Victoria which is a key machinery supplier,” he said.

“Whilst agricultural suppliers will continue operating, these restrictions will inevitably affect the way work is done.”

In the other machinery categories, combine harvester sales have now slowed with most product now in place for the upcoming harvest season. The full year picture is likely to be around 15 to 20 per cent down on last year, the TMA reported.

Baler sales continued to boom and were up 33 per cent YTD, while sales of out-front mowers were again healthy and remain 14 per cent ahead of the same time last year.