√New-car bubble about to burst: Stockpiles forming, but Toyota still has long wait times

Australia’s top-selling car brand, Toyota, still has long wait times. But most mainstream rivals are starting to stockpile cars, which is a big win for buyers searching for a deal.

EXCLUSIVE

New-car wait times in Australia are on the brink of returning to normal after three years of stock shortages, production slowdowns, and agonising delivery delays triggered by the global pandemic, according to industry sources and multi-franchise dealers canvassed by Drive.

While market leader Toyota still has lengthy wait times of between six months and two years across most models in its showroom line-up – and Hyundai, Kia and Ford have wait times ranging from three to nine months on in-demand cars – most mainstream brands are beginning to stockpile vehicles.

“It’s not over for Toyota but it’s over for the rest of us, a lot of dealers are now overstocked with cars and they’re piling up,” a major multi-franchise dealer told Drive on condition of anonymity, because he is not permitted to speak to media on behalf of the brands he represents.

“I’m sitting on hundreds of cars, most dealers I know are either sitting on hundreds of cars or soon will be,” he said.

“That means the long wait times will largely be over for a lot of customers, and you will start to see discounts return on some models.”

The boss of Kia Australia, Damien Meredith, said while it is unlikely Australia will ever return to “the bad old days when there were 100,000 cars parked on grass (in holding yards)”, across the entire industry, the supply of new motor vehicles has started to improve.

Hyundai and Kia still have delivery delays on popular hatchbacks, SUVs, people-movers and vans – according to the latest “supply chain update” bulletins issued to dealers.

And Ford still has delivery delays on popular variants of the Ranger ute such as the Wildtrak V6 and Platinum V6 (up to 12 months) and the Raptor performance pick-up (up to two years).

But dealers representing brands such as Nissan, Mitsubishi and Mazda – who were canvassed by Drive – say they are finally able to immediately deliver a significant proportion of their model line-ups.

An industry executive said, over the past three months, more than 50 per cent of new cars have been delivered within a month of the customer order being placed.

Two years ago the average time between an order being taken and a new vehicle being delivered was beyond three months.

The executive also noted, however, about 25 per cent of new motor vehicles are still taking longer than six months to deliver after being ordered by customers.

“We are seeing pockets of improvement across some brands and gradual improvements in vehicle supply across the industry in general,” said James Voortman, the CEO of the Australian Automotive Dealers Association (AADA).

“However it’s not every make and model, and buyers still may need to exercise patience when searching for a new car.

“That said, new motor vehicle supply is trending in the right direction and we hope to be able to offer shorter and more realistic waiting times soon.”

Another industry analyst noted the rapid rise in the sales of Chinese cars in Australia – today they represent 16.5 per cent of all new motor vehicles sold, versus 1 per cent five years ago.

The surge in sales of Chinese cars has largely been driven by better supply levels than vehicles made in Japan, Thailand and South Korea, historically our three largest sources of motor vehicles.

However, the industry analyst said the rapid growth in the sales of Chinese brands could start to plateau unless they urgently address quality concerns.

“People who buy a Chinese car are delighted at the start of their ownership experience because they got a good deal,” the car industry executive told Drive.

“But if they have a bad customer experience or the car has quality problems or electrical gremlins, that could start to dampen people’s enthusiasm for these emerging brands,” the car industry executive told Drive.

“There is no way in a (social media) connected world, other buyers aren’t going to find out about the bad experiences existing owners might be having.

“Car companies can only get away with poor quality and poor customer experience for so long, before these bad ownership experiences come back to bite them.”

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