Long waits ahead for new vehicle buyers

Friday, 21 May 2021

The Toyota Hilux retains a slim lead overall, but the Ford Ranger had a good month in April, so is closing in on it.

The vehicle shortage crisis is getting worse. Announcements are coming from multiple local distributors warning of long wait times for popular models, and it looks like there’s more to come.

But, interestingly, it seems that people are coming to terms with the supply shortage. A new report from the U.S says that buyers are aware of the issues, and of the subsequent high prices.

“Shoppers are expecting high prices and limited choices, and that’s exactly what they are finding,” said Vanessa Ton, a senior industry intelligence manager for analyst firm Kelley Blue Book in the US.

If you want a hybrid RAV4, you’re in for a long wait.

Last week, Toyota told us the average delivery time of a new Toyota is currently 16 weeks, “but it does vary by model, with some Hilux and RAV4 Hybrid models having longer wait times of up to 4 to 8 weeks more. Some models are less, such as Corolla, Camry or Hiace.”

Similar six-month wait times are in store for Hilux buyers.

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Kia has gone as far as removing the Sportage from its website entirely because it can't satisfy demand.

At the time, this was because of the ongoing global semiconductor shortage, as well as Covid-19-related delays and overseas demand for some accessories.

A new release today has confirmed that all areas of Toyota New Zealand’s operations are now impacted, including new vehicles, used vehicles from Japan, parts and accessories.

Steve Prangnell, general manager for new vehicles, logistics and franchise development for Toyota New Zealand, said in the new release that the popularity of hybrids is seeing wait times of “upwards of six months” for vehicles like the RAV4 Hybrid.

Ford seems to be in generally steady waters with its supply of vehicles, with only the European-built Focus and Escape hit.

“The problem we are facing is we are now at more than 10,000 back orders and we just can’t get the supply to be able to fill these in a fast manner,” he added.

Though there is a silver lining – more than 350 people have put an order down on the new hybrid-only Highlander, despite demo vehicles not yet being available.

Another brand hit by the shortage is Kia, which has gone an extra couple of steps and completely removed the popular Sportage SUV from its website until next year.

Volkswagen and Audi have supply of vehicles for now but are expecting things to tighten up.

“There has been an overwhelming response to Kia Sportage, so much so that we are unlikely to meet demand,” said Todd McDonald, managing director of Kia New Zealand.

“Therefore, in order to manage customer expectations, we have taken the unprecedented step of removing it from our website until the all-new model arrives in 2022.”

A spokesperson from Ford New Zealand also confirmed last week that it was seeing the effect of the semiconductor shortage as well but so far not in respect to the top-selling Ranger ute.

“Ford is concentrating on how to best use our allocation of semiconductors to deliver high-demand vehicles to customers around the world. Our most recent forecast for the second quarter is based on commitments from our suppliers who also support other automakers.

“Locally, we are seeing the impact mostly on Escape and Focus (both built in Europe).”

Stuff was also told by a spokesperson for Mitsubishi Motors New Zealand: “As with all manufacturers, Mitsubishi is experiencing delays due to the semiconductor global shortage. However, due to confident ordering earlier in the year, as well as some innovative thinking, we are in a strong position to minimise these delays for our customers.”

Nissan said: “A global shortage of semiconductors has affected parts procurement in the auto sector. The impact has been increased by the fire caused at Renesas Electronics in March. Due to the shortage, Nissan is adjusting production and taking necessary actions to ensure recovery.

“We continue to work closely with our supplier partners to assess the impact on our supply chain and production, and minimize inconvenience for our customers.”

At this stage, Volkswagen and Audi have cars coming in at a steady rate but have been told that “there could be an effect on stock later in the year.” Same goes for Mazda and Honda.

According to consulting firm AlixPartners, the shortage will cost the global automotive industry US$110 billion in 2021. Vehicle production is forecast to be down by 3.9 million vehicles for this year alone, up from a previous figure of 2.2 million vehicles.

As for when we can expect things to get back to normal? Dan Hearsch, a managing director in AlixPartners’ automotive and industrial practice, told CNBC that it probably won’t happen this year. “By Q3 [2021], there’s enough to get everybody back up and running for the most part.

“And then in Q4, we should get humming again and then next year get back to normal, hopefully.”

Stuff reached out to the Motor Industry Association of New Zealand for comment, and CEO David Crawford said that while stock levels are very low, a market dip remains a possibility, not a certainty.

“If there are delays in shipments, or production delays increase due to the micro-chip shortage then at some point supply constraints will mean lower monthly sales.

My observation is that current market conditions of strong demand combined with production and shipping delays is stressing the supply chain, which while not at breaking point now, is pretty close to it.

Hopefully we can continue to source stock in a timely manner and put a dent in those long waiting lists.”