Global shortage of new cars leaves car yards nearly empty and forces used car prices up

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He said, normally, he would have eight to 12 to cars on display.

“At the moment, we have one, so supply is very tight,” he said.

“The factory in Japan closed down for a month, so it’s been a chase, a catch-up, ever since.”

Mr Sutton said he still had plenty of people interested in buying new cars — they just had to wait a little longer.

Demand up, supply down

a man with glasses looking at the camera with an office in the background
Neil Sutton is finding it hard to get new cars to fill his car yard.(ABC Alice Springs: Oliver Gordon)

What’s happening at this car dealership in Alice Springs reflects a global economic trend.

There are fewer new imported cars available due to factory disruptions around the world, leading to an increase in demand for used cars.

And with a rise in demand, comes a rise in prices.

CommSec data shows used car prices are up 30 per cent from this time last year, after falling in the early stages of the pandemic because nobody wanted to buy a car they could not test drive.

Mr Sutton is awaiting his next shipment of new cars, which is due in a few weeks.

Half of the six cars on that truck are already sold, and he said he was confident he would be able to sell the others.

“People are getting back on with their life.

And he said there were other market conditions favourable to his business right now.

“Interest rates are very low for new vehicles, so I think they’re taking advantage of that to get into a new vehicle.”

Used car prices up

Alan Thorp, who operates the second-hand car business Stuart Highway Autos, said he had seen the price increase affect his business.

He buys second-hand cars wholesale, does them up, then sells them on.

He said the cost of the used cars he bought had gone up around 50 per cent.

Mr Thorp said he was doing his best not to pass on that wholesale price rise to his

Man  with grey hair looking to the side of camera with a car workshop in the background
Alan Thorp from Stuart Highway Autos is seeing the price of wholesale used cars rise as a result of a shortage of new cars.(ABC Alice Springs: Xavier Martin)

Definite supply issues

Dealers around the country are reporting similar issues.

Belinda Stiles, dealer principal with Rosenthal’s Automotive in Berri in South Australia’s Riverland, is struggling with an undersupply of new vehicles.

“There is definitely a supply issue of vehicles.

“COVID-19 has been felt with our car manufacturers,” she said.

She said she was noticing customers were more willing to make choices rapidly.

“The customers realise it is harder to get a vehicle, so they’re more inclined to make a decision, rather than going home and thinking about it.” Ms Stiles said.

three four wheel drive vehicles on a car yard lot with the sign for the business in the bcakground
This owner of this car yard in Alice Springs has seen prices of used cars go up.

Seller’s market

Amber Alderson recently sold a car and was surprised at the number of people interested.

“I put it on a Riverland buy-swap-and-sell site and had 11 messages within an hour,” she said…

 

This article is from ABC News, you can read the full article here:

https://www.abc.net.au/news/2020-10-16/global-shortage-of-new-cars-leaves-car-yards-nearly-empty/12769138