New Tractor Sales Are Declining

[jyoutz]

company deals/incentives, and i want a good down payment. plus i do not want to buy something new go out of town and have it stolen so I have a couple of months to wait.

Insurance is the answer to theft.

 

[rScotty]

I think it has to happen. You can’t combine high prices and high interest rates and expect people to buy.
The plandemic is over. Those sales were made. Now we are back to a non-pandemic mentality (for now-you never know what may happen next) and I don’t think we will see the “fear/panic” buying we saw in 19-21

I don't see a trend toward falling prices. I haven't seen them falling yet, and when the economy had high interest rates or downturns before I don't believe that prices fell on new equipment. If anything they went up.
This financial time doesn't seem different from any others. I doubt if waiting will work to anyone's advantage.

 

[scootr]

Insurance is the answer to theft.

 

[scootr]

I don't see a trend toward falling prices. I haven't seen them falling yet, and when the economy had high interest rates or downturns before I don't believe that prices fell on new equipment. If anything they went up.
This financial time doesn't seem different from any others. I doubt if waiting will work to anyone's advantage.

If the majority believe as you and they keep buying no matter the price - then you will be right. If the consumer looses their buying power the they will have NO CHOICE but to put off the major purchase and that will hurt the manufacturer to the point they will have to lower the prices to make sales once more.
It's economics 101

 

[2manyrocks]

In my experience, the trend is for prices on new equipment to ratchet upwards. Last year, my local Kubota dealers couldn't keep L2501s in stock and only one dealer agreed to honor the equine discount program. One dealer refused to honor the discount. It may be that sales and inventory will come into a better balance so that dealers will negotiate again, but it remains to be seen what the starting base price of new equipment will be.

40% of US home sales happen in the Spring. If home sales drop off or major price reductions happen, then that will be an indicator of where the economy goes from there.

I suggest paying close attention to this week's Fed meeting.

 

[nova3930]

If the majority believe as you and they keep buying no matter the price - then you will be right. If the consumer looses their buying power the they will have NO CHOICE but to put off the major purchase and that will hurt the manufacturer to the point they will have to lower the prices to make sales once more.
It's economics 101

inflation is a tricky devil since it generally raises prices across the board for both producer and consumer. yes there are generally some price cuts to a point but you can't sell things at a loss forever....fundamental tenet of economics is that the price of anything has to exceed the cost of production or the provider will eventually cease as a going concern....

Personally I suspect we're about to enter a phase similar to the 1970s with economic stagnation coupled with inflation because of the above factors....

 

[TN8Man]

What's worse for a seller. Lowering the price of their product to make sales or not making sales because their product is overpriced and they won't budge?

 

[nova3930]

What's worse for a seller. Lowering the price of their product to make sales or not making sales because their product is overpriced and they won't budge?

one has money tied up in inventory and one is churning money at a loss. to me the latter is worse because you're losing money faster....

 

[Hay Dude]

In my experience, the trend is for prices on new equipment to ratchet upwards. Last year, my local Kubota dealers couldn't keep L2501s in stock and only one dealer agreed to honor the equine discount program. One dealer refused to honor the discount. It may be that sales and inventory will come into a better balance so that dealers will negotiate again, but it remains to be seen what the starting base price of new equipment will be.

40% of US home sales happen in the Spring. If home sales drop off or major price reductions happen, then that will be an indicator of where the economy goes from there.

I suggest paying close attention to this week's Fed meeting.

Look at rising interest rates, hyper inflation on literally everything we buy for the last 2-3 years and it’s a recipe for reduced buying power for the average American.

I just saw that due to inflation alone, making $100,000 in 2019 translates to making $82,000 in 2023.

 

[2manyrocks]

A dealer might reduce their profit margin to make a sale of what they have in stock instead of continuing to incur carrying costs, but they aren't likely to buy inventory from a manufacturer to sell it at a loss.

It wasn't so long ago that a 3br 2 bath brick house could be purchased for what they are selling compact skid loaders these days.