Market analysis

Tractor sales record in June

The federal government’s instant asset tax write off scheme brought a major boost for dealerships last month, the Tractor & Machinery Association says

Sales of tractors in Australia broke the 2,000 unit mark in June for the first time since 1981, driven largely by the federal government instant asset write-off incentive. This is a whopping 48 per cent ahead of June last year, which itself was considered a strong result, and brings the year to date 21 per cent ahead. All the states reported rises, Queensland 36 per cent ahead, now 17 per cent ahead for the year to date, New South Wales 54 per cent up 22 per cent up YTD, Victoria ahead another 46 per cent, 30 per cent ahead of last year and Western Australia picked up 33 per cent and now sits 3 per cent behind last year. South Australia is continuing to claw back last year’s poor run, up 81 per cent for the month now 32 per cent up YTD, and Tasmania is up 39 per cent for the month and now 26 per cent ahead for the year. Just like last month the only size category not to benefit from the flurry is the large 200 horsepower (150kW) range that reported a drop of 7 per cent, 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 per cent (40 per cent for the YTD), driven by strong horticultural demand. The under 40hp (30kW) range, was up 50 per cent for the month and now sits 16 per cent ahead for the YTD. The 40 to 100hp (30–75kW) range was again up strongly 48 per cent now 20 per cent ahead for the year. As dealers expect demand to remain strong, in light of the extension of the instant asset write-off to December 2020, inventory levels are on many dealers’ minds. Supply from the US and Europe is slowly resuming after periods of factory closures and reductions in production, while Japanese production is largely on schedule as these locations were less impacted. 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 per cent year to date, whilst sales of out front mowers were again healthy and remain 15 per cent ahead of the same time last year.

Left: The instant asset tax write-off was a major boost for tractor and machinery dealers in June. Image courtesy Alamy

Gary Northover is executive director of the Tractor & Machinery Association of Australia (TMA). He can be contacted on (03) 9813 8011 or at gary@tma.asn.au