Farms and Farm Machinery – September 2019

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Australia’s eastern states have seriously reduced the rate of

tractor sales, but at least one analyst says the trend might be

coming to an end.

Speaking at the annual Tractor & Machinery Association

Conference in July, market research company Agriview

managing director Alan Kirsten said a June resurgence in tractor

sales could be a sign of things to come.

“Going forward there seems to be a lot of confidence – there’s

a lot of traffic at the dealers now that wasn’t there six weeks

ago, so that is a positive,” he says.

Kirsten said there was no consensus about the reasons for the

change, but from speaking with dealers all around the country,

it was clear that demand had increased, on the back of positive

results in June.

“The biggest concern was that there was a lot of big iron

around that needed to be shifted, though fortunately WA has

absorbed a lot of that,” he says, noting sales were up 49 per

cent in the state, compared to a 40 per cent fall in NSW.

“That inventory has now slowed down, because the companies

became tactical towards the end of the (financial) year and we

are slowly working through the inventory.”

“We are not going to go gangbusters, but I don’t think we are

going backwards... there seems to be a lot more confidence

and a lot more traffic to the dealerships, so we are in good

shapegoingforward,”hesays.

Despite this, it was unlikely that the rate of tractor sales would

reach above 12,000 for the year, he said, with 11,500 a more

likely figure.

The total annual sales of combine harvesters was also likely to

be lower, he says, as order banks are low while inventory levels

are still high.

“Given that we were around 627 sold last year, I am guessing

around 550 this year – if that happens, it will be the smallest

combine market since 2008,” he says.

But while combine harvester sales were expected to fall, baler

sales were on the up, with high demand for fodder encouraging

new buyers for round and larger square balers in broadacre

country.

But even while more customers were on their way, a number of

dealers would be looking to sell their businesses as thy did deals

to sell excess inventory.

“This financial year we will see more changes in the number of

businesses – the outlets might not change but the businesses

controlling them will,” he says.

“The difficult financial year they have had through the low

margins of the year... and the potential overhang for all their

sales of new machinery will have an impact on a lot of these

dealersoutthere.”

Left: Tractor sales will be in a good position

going forward, analyst Alan Kirsten says.

Image courtesy Alamy.

Predictions are that tractor sales are on

their way back up for the rest of 2019,

but dealerships are set to continue their

consolidation trend. Andrew Hobbs reports.

strong

second half

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