Decreasing CUT sales?

[radman1]

JerryG
Sorry for my misinterpretation of the %.

 

[N80]

The zero% financing deals have been going on for quite some time. It was my understanding that the low financing deals were started in order to compete with the used market. In any case, it is/was a very effective tool in the regard. When you can get a new tractor for a small percentage more than a used one and get zero% financing it makes the used market look pretty unappealing.

My local Kubota dealer seems to have drastically increased his stock. It is like a huge orange parking lot out there. Lots of 5040s.

I wonder if the increase in 40+ hp sales comes from the bigger-better-faster-more syndrome? In other words, a lot of people are buying and loving their CUT tractors. This has been going on for several years. Now, these folks are wanting something bigger and better because, well, that's how we are here in the US. We always want a little more than we have, even if we don't really need it. And hey, those Kubota 5040s look so much cooler than my L4400!

 

[lawn_king]

Things are slow here (massachusetts) not much for big landscape construction projects out there this year. Tons of used equipment for sale, tractors, skids, dumptrucks, plows you name it. New sales will tend to be down with so much used equipment on the market.

 

[Farmwithjunk]

JerryG
Down 14.1% in past 12 months is surprising. No wonder the 0% financing. With fall and winter approaching the sales may get worse. The economy doesn't seemed to have worsened that much. Any reasons why the decrease?

A few random thoughts.

Even in the best of times, there is usually a peak. Then the market reaches a saturation point. We may have reached that level. (JMHO)

On the economy. Numbers and stats can be misleading. All the leading indicators point to a solid economy. That may be smoke and mirrors. Fuel prices and their effects on "middle America" are starting to hit those above and below the middle. People just aren't spending their expendable cash, or they don't HAVE expendable cash like they did a year ago.

Worries involving the middle east have a lot of folks sitting on their hands too.

Troubled times we live in right now.

 

[slowrev]

Are we approaching market saturation on CUT sales ? ie most everyone who is likely to buy one has done so ?

 

[Farmwithjunk]

Are we approaching market saturation on CUT sales ? ie most everyone who is likely to buy one has done so ?

Maybe not saturation point, but there's always the chance we've reached the peak in sales. There has been a zillion of those little things sold in the last few years.

 

[Keith_B]

Maybe not saturation point, but there's always the chance we've reached the peak in sales. There has been a zillion of those little things sold in the last few years.

That is probably what has happened. CUTs have a far longer life than other big ticket items, like automobiles, and there will not be near as many returning customers because of this. As pointed out previously the bigger and better fever is probably feeding the used CUT market, which was at one time nonexistent.

 

[Steve02]

CUTs have a far longer life than other big ticket items, like automobiles, and there will not be near as many returning customers because of this.

Great, you had to point that out the them. Now they are going to start building tractors like cars, Planned Obsolesence.. You'll need to buy a new tractor every 4-5 years after the one you have starts falling apart (or becomes cost prohibative to maintain).

 

[VistanTN]

I could hypothesize a lot of possibilities, but for fact I only have NY Times article from last Wed: "Deere Profit Rises 13% on Cost Cuts and Sales." While it doesn't break down the CUT portion, here's what it does report compared to same quarter last year:

Sales in US/Canada +6%
Sales elsewhere (incl currency conversion cost) +3%

Construction Equipment +13%
Commercial & Consumer Equipment +8%
Farm Equipment +1%

However, for the year
Construction Equipment +12%
Commercial & Consumer Equipment +8%
Farm Equipment -4%

Deere plans to cut production 10% in 4th quarter which will result in a net cut of 5% for the year.

Doesn't answer all the questions and it is only one company, but these days how "ole green" goes is pretty indicative of the farm market in general.

 

[frank_f15]

A few random thoughts.

Even in the best of times, there is usually a peak. Then the market reaches a saturation point. We may have reached that level. (JMHO)

On the economy. Numbers and stats can be misleading. All the leading indicators point to a solid economy. That may be smoke and mirrors. Fuel prices and their effects on "middle America" are starting to hit those above and below the middle. People just aren't spending their expendable cash, or they don't HAVE expendable cash like they did a year ago.

Worries involving the middle east have a lot of folks sitting on their hands too.

Troubled times we live in right now.

very well stated, i think you will see all things drop off in sales