Keen to get into a new car? The long queue for many models is expected to linger for some time – here’s why
The days of walking into a dealership, choosing your model, variant, colour and options then driving it away within days are long gone.
Indeed, if you’ve been shopping for a new car lately, you’ll be well aware that unless you take the white mid-spec version sitting on the dealer’s forecourt, you’ll have to wait a while.
Waiting times of six months or more for new-vehicle deliveries are not uncommon across many auto brands in Australia today, due to the global semi-conductor shortage and other COVID-related supply delays including factory closures and shipping hurdles, plus increased customer demand.
Evidence of the global automotive supply breakdown can be seen in slower new-car sales, which in January dipped by almost five per cent as many of the volume brands sold fewer vehicles.
Among the top 10 brands, only Mazda, Mitsubishi, Kia, MG and Isuzu increased their sales – despite the stock shortages – and even the fast-growing Kia brand is struggling to land enough vehicles from Korea and Europe, with demand for new models like the electric Kia EV6 far exceeding supply.
Kia has so far secured 500 examples of the ground-breaking dedicated EV for Australia, but received 25,000 expressions of interest and 1800 confirmed customer orders, meaning new orders will take several years to deliver.
Damien Meredith, the chief operating officer of one of Australia’s fastest-moving brands, Kia, believes it will take at least another year for clearer skies to return and says the current supply shortage has led to a seismic shift in the local auto industry.
“I think it will still be at least 12 months before there’s an improvement in our supply channels for our completed products. It’s going to be quite difficult for another 12 months at least,” said Meredith.
Data shared with carsales reveals that Kia’s new-vehicle stocks are 20 per cent below normal levels because “component shortages continue to impact several models across the range, particularly the higher trims, with delays of six-plus months,” said a Kia spokesperson.
“Delivery times vary depending on the vehicle,” said Meredith. “For example, it’s been nearly 12 months with Sorento GT, but then Seltos with mid-range models is around three months.”
So a three-month wait is considered a good thing in the present climate?
“Well, I waited eight months for a coffee table,” joked Meredith. “What’s happening is that, as an industry, we’ve moved on from having X-thousands of cars parked on grass waiting for customers.”
Disgruntled customers sick of the waiting times advised by a particular dealer are finding that shopping elsewhere doesn’t always yield better results.
“There’s customer frustration, we understand that,” said Meredith.
“The thing is, if you do move, you go to the bottom of the chain, and you’ve got to wait even longer. But I think the dealers are far better at handling the situation now.”
The coronavirus pandemic is also affecting new-vehicle releases for many brands including Mercedes-Benz with its new C-Class and Kia, which has delayed its Sorento Hybrid launch from 2021 to February or March because “homologation was delayed due to resources being stretched, a result of COVID”.
Kia has not had to delete any model lines or reduce equipment levels on any of its vehicles thus far and says it doesn’t intend to in future, beyond the standard product planning and rationalisation processes that led to nixing low-volume models like the manual Cerato.
Hyundai and Kia have will soon have their own semi-conductor supply to avoid being reliant on Taiwan, which supplies 60 per cent of the world’s semi-conductors.
So when will the delays become a thing of the past?
“It takes a while to build up [semi-conductor supplies]. I think a lot of manufacturers are saying they’re going to be out of trouble after six months, but I don’t see that,” said Meredith.
Despite the overcast outlook, Kia’s local COO the Korean brand will eclipse its 2021 sales record of 67,964 vehicles and challenge Ford’s position as the fourth most popular brand Down Under in 2022, as many of last year’s orders are filled.
“I’m confident we’ll sell 70,000 cars this year and we’ll be able to deliver 70,000 cars to our customers – so there’s a little bit of growth there. But it’ll still be tough.”
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Keyword: New-car delivery delays to continue