New Tractor Sales Are Declining

[Torvy]

In general, when the economy gets tight, luxury goods suffer the most in favor of inferior goods. In economics, luxury and inferior have little to do with quality, just perception. For instance, a woman may buy a 'brand-name' purse when things are good, but find a higher quality, but 'off-brand' purse when money is tight.

As the economy worsens, it will be to the advantage of the lower-priced tractor brands (Ceteris paribus). While the big boys will have deeper pockets to ride it out, the tendency will be for them to lose market share to brands with a better value proposition. This applies to almost everything, not just tractors.

The continued spending is often due to the perception by consumers that things are going to get worse. Buy now because it will be worse later. Expectations are literally one of the five determinants of Demand. When a critical mass of consumers begin to believe that the economy will get better soon, they will slow spending and hold dollars to make future purchases.

@Cahaba Valley Farm FYI, "cost of goods" is the money spent by a producer to make a product. Roughly speaking, sale price minus cost of goods equals gross profit. I think maybe you meant price of goods.

 

[Hay Dude]

I think it’s practical to also expect the proposed increase in corporation taxes will also increase tractor prices.

 

[riptides]

3% was the 50 year average. Hardly a passing trend. Accept that this is bad. It will get worse.

(Inflation rate)

I was referencing mortgage rates that were hovering around that percentage.

A whole generation of buyers thought that as normal....and probably thought it would be like that for a long while.

 

[Cahaba Valley Farm]

As the economy worsens, it will be to the advantage of the lower-priced tractor brands (Ceteris paribus). While the big boys will have deeper pockets to ride it out, the tendency will be for them to lose market share to brands with a better value proposition. This applies to almost everything, not just tractors.

You must be referring to JD because most of the Kubota franchisees are mom and pop.

@Cahaba Valley Farm FYI, "cost of goods" is the money spent by a producer to make a product. Roughly speaking, sale price minus cost of goods equals gross profit. I think maybe you meant price of goods.

Torvy I don't have any idea what your referencing.

 

[Cahaba Valley Farm]

I drove by my local dealer this morning to take a look at his inventory. Nothing looks like it has moved. I will continue to make periodic updates about my local market as we progress into spring.

 

[TN8Man]

3% was the 50 year average. Hardly a passing trend. Accept that this is bad. It will get worse.

(Inflation rate)

It will get worse but not for the reasons most people think.

Listen to what the global leaders are saying. They are not hiding their goals, its in plain sight.

 

[2manyrocks]

I drove by my local dealer this morning to take a look at his inventory. Nothing looks like it has moved. I will continue to make periodic updates about my local market as we progress into spring.

Did you buy a tractor or are you still looking?

 

[Yander]

I drove by my local dealer this morning to take a look at his inventory. Nothing looks like it has moved. I will continue to make periodic updates about my local market as we progress into spring.

Just curious what make of tractors does the dealer have?

 

[Cahaba Valley Farm]

Did you buy a tractor or are you still looking?

Not looking, waiting.

 

[Cahaba Valley Farm]

Just curious what make of tractors does the dealer have?

He is a Kubota dealer.