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July 7, 2020

Instant Asset Write Off delivers record month for Tractor Sales

June has seen the sale of tractors breach the 2,000 unit mark in Australia for the first time since 1981 driven largely by the Federal Government Instant Asset Write Off incentive. This is a whopping 48% ahead of June last year, which itself was considered a strong result, and brings the year to date 21% ahead. The Instant Asset Write Off has contributed to a perfect storm for tractor sales as the weather conditions have supported the strong demand for locally produced food arising out of the COVID 19 pandemic.

All the states reported rises, Queensland 36% ahead , now 17% YTD, New South Wales 54% up 22% up YTD, Victoria ahead another 46%, 30% ahead of last year and Western Australia picked up 33% and now sits 3% behind last year.

It wasn’t just the large states that enjoyed the spoils with South Australia continuing to claw back last year’s poor run, 81% up for the month now 32% up YTD, Tasmania continues to flourish up 39% for the month and now 26% ahead for the year.

As we reported last month the only size category not to benefit from the flurry is the large 200 hp (150kw) range which reported a drop of 7% which is now where it sits for the YTD.

The 100 to 200hp (75-150kw) category again leads the way with another strong month up 66 %. (40% for the 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.

The under 40hp (30kw) range, was up 50% for the month and now sits 16% ahead for the year to date.

The 40 to 100hp (30-75kw) range was again up strongly 48% now 20% ahead for the year.

The question on everyone’s lips concerns inventory levels for the balance of the year as dealers anticipate demand to remain strong, particularly in light of the extension of the Instant Asset Write off to December 2020. Supply of machines from places such as the US and Europe are beginning to resume after periods of factory closures and reductions in production due to the imposition of social distancing protocols. Product coming out of places like Japan however remain largely on schedule as these locations were less impacted. What this means for purchasers is likely to be a little less in terms of flexibility and choice, however, you will still be able to buy a tractor!

With regards to other products, sales of Combine Harvesters have improved ahead of the harvest season with 134 units sold in the first half year compared with 113 in the first half last year.

Baler sales boomed in June, now 36% year to date, whilst sales of Out Front Mowers were again healthy and remain 15% ahead of the same time last year.

The results for the TMA Quarterly Dealer Business Sentiment Survey are now in and not surprisingly, the outlook expressed by dealers is quite positive. Of interest was the response to the question regarding plans for the workforce with the majority of dealers stating they plan to continue to hold onto their workforce with a growing number looking to expand.

Gary Northover, Executive Director