Slump in exports of used tractors hitting new sales
By Geoff Ashcroft
FALLING numbers of secondhand tractors being exported into Europe is taking its toll on new tractor registrations.
That is the message from Paul Claydon, partner at Cambridge Machinery Sales, who in recent months has seen a decline in tractor numbers sold for export. The strong £ pound is to blame, he says.
"Around 50% of tractors which pass through this auction traditionally go overseas," he explains. "We are selling about 70 units less each month. And many simply do not make the reserve price."
He feels the problem will be hard to resolve unless second-hand tractor prices, or the value of the £ weakens.
"Dealers have been giving too much away on trade-ins just to clinch the deal on a new tractor," he claims. "It leaves them with a high-value part-exchange that becomes increasingly harder to move on."
"Our overseas customers still want the second-hand tractors. But realistically, it will take a devaluation in the £ before the export market opens up again."
A similar view is held by Paul Graylen, joint managing director of the Platts Harris Group based at Lincoln. "For years, the secondhand market has been underpinned by the export trade," he says. "And if the trade cannot move its second-hand stock, the prices offered against a new tractor will have to fall."
"With lower and lower commodity prices, farmers wont stomach the extra money required to change their tractors – deals simply wont get done." *
Is it now just window shopping? Fewer second-hand tractors are heading overseas thanks to the strength of the £. Knock-on effect could see new tractor sales fall even further.