No discounts in sight for new car buyers

afr.com:

A structural undersupply of more than 300,000 new vehicles along with the rise of electric cars, where demand is crushing supply, means new-car buyers face paying the full sticker price on their next vehicle.

The chief executives of the three large ASX-listed car dealership groups say order banks are still long, even though new vehicle supply from overseas carmakers is improving and logjams at ports are slowly easing.

New vehicle supply is improving as delays at ports ease, but there is still a large backlog of orders.  Bloomberg

But the sheer size of the back order books, which will take almost two years to run down, means motorists will be paying full price for an extended period, and preserving dealer margins.

Mark Weaver, the chief executive of Peter Warren Automotive, which sells 27 car brands including Toyota, Volkswagen and Mazda and has 25 dealerships in the eastern states, says it will probably take about 18 months for the group to fully unwind its order book. Population growth through a stepped-up migrant intake will add extra pressure.

“We see these taking a minimum 18 months to tackle and consumers should think now if they plan a new car in the next six months,” he said.

Mr Weaver said there were “clearly signals of supply improving, but port congestion makes model availability inconsistent”. He said 50 per cent of new-car buyers signing on the dotted line were waiting a minimum of one month for orders to arrive, depending on the brand.

“The supply limitations arising over the last few years have meant wait times and full retail price outcomes for consumers,” he said. “For those seeking exactly what they want in their motor car, we expect an orderly wait time and full list price to continue.”

Keith Thornton,