The Australian agricultural machinery market is experiencing a surge in sales...
... according to findings presented by Alan Kirsten of Kynetec’s Agriview at the 2022 Tractor and Machinery Association of Australia annual conference.
However, amidst this promising growth, the industry faces a range of challenges that demand attention and strategic planning.
The State of the Industry Report and a comprehensive dealer sentiment survey revealed record-breaking tractor sales in June 2022—the highest in 41 years, with the second-highest monthly sales since 1979, a clear indicator of robust demand in Australia.
But the question remains, how long the demand could last?
Supply chain issues continue to exert significant pressure on delivery numbers, resulting in a backlog of orders. The industry must proactively address these challenges and explore innovative solutions to mitigate the disruptions caused by the unpredictable nature of the Covid-19 pandemic and the resulting supply chain issues.
Managing the market
Another critical finding from the survey is the overwhelmingly low inventory levels across various machinery categories, including tractors, headers, balers, and sprayers. These low inventory levels pose challenges for timely delivery after purchase, leading to longer lead times. Moreover, the strong sales demand has prompted 80% of respondents to express their intention to increase their workforce. This highlights the need for industry players to invest in human capital and ensure sufficient support staff to meet the growing demand.
However, the industry also faces a significant challenge in terms of its distribution channel. The current system operates with only about 30% of the number of outlets that existed during the high-volume sales era of the late 1970s. This calls for a strategic assessment of the support infrastructure, including the number of support staff and physical facilities required to service the units sold effectively.
As the Australian agricultural machinery market continues to evolve, it is crucial for industry stakeholders to proactively address the implications of these findings. Collaborative efforts among manufacturers, dealers, and industry associations will be key in navigating the changing landscape and ensuring sustainable growth.