Why Is There a New Car Shortage?

Why Is There a New Car Shortage?
If you’re wondering why new cars are so hard to come by, you’re not alone. Pre-pandemic a new car shortage may have been something you would have never expected given the multitude of dealerships lined with new makes and models.  However, fast forward to present day and dealerships right across the globe are facing new car shortages subsequently driving the demand for pre-owned vehicles.  Analysts indicate dealers definitely seem to have more inventory than they did a year ago, but still nowhere near pre-pandemic levels. Oliver Zipse, CEO of BMW said, “we should expect to start seeing improvements at the latest next year, but we will still have to deal with a fundamental shortage in 2023.”

Why the Shortage?

New Car shortages are the result of a multitude of factors including:
  • Logistical issues
  • Unique border restraints
  • Shortages of semiconductors
  • Employment working conditions

  1. Logistical Issues

With the majority of customers waiting 6-12 months for a new car to arrive, this has resulted in a shortage of trade-ins and consequently created a supply and demand situation. Early in the pandemic, car manufacturers made small but essential decisions to limit certain components resulting in the present shortage of new cars and subsequent demand for used cars. James Voortman, chief executive of the Australian Automotive Dealers Association said “About six months into the pandemic, a lot of manufacturers cut their production, because they expected no-one would be buying new cars because of the dire economic consequences that were being predicted.” However, when economies didn’t topple as expected, manufacturers were left scrambling to ramp up supply with little access to microchips. Unfortunately, “they’ve been playing catch-up ever since” said Voortman.  In the meantime however, dealers have been presented with an opportunity to maximise sales elsewhere, particularly used cars. 

  1. Unique Border Restrictions

To further complicate issues, supplies were restricted globally by varying restrictions on international ports and borders. Any car manufacturers that managed to secure semiconductors further struggled to transport their vehicles and keep up with the increased demand. As a result of these restrictions many customers have made the switch to used cars, driving business towards used car dealers Frankston and second hand cars Frankston.

  1. Shortage of Semiconductors

Often referred to as ‘the brain of the car’, sustained shortages of semiconductors continue to halt vehicle assembly lines across the globe with latest estimates indicating almost 4 million cars have been wiped off production schedules this year.  Due to the intricacy of semiconductor designs, there are only a finite number of places in the world that are tasked with engineering these parts. Leading industry journal Automotive News USA said, “any hopes the semiconductor shortage will disappear in 2022 is wishful thinking.” According to the chief financial officer of Volkswagen, the ongoing semiconductor shortage will likely last at least two more years. Luckily used cars Frankston and Frankston used car dealerships have an extensive range of used cars in stock available for immediate delivery.

  1. Employment Working Conditions

Since the pandemic started, large car manufacturers have experienced increased staff shortages due to Covid-19. But it’s not just employees who are sick, many who are on sick leave are perfectly healthy, but they’ve either been exposed to the virus or are missing work to take care of others.  This has placed a significant strain on the manufacturing stage of new cars, with long wait times stretching beyond 12 months. Customers are turning to used cars as a quick and accessible alternative. 

But Can I Still Buy a Car?

Absolutely. With a massive shortage of new cars due to supply chain shortages, buyers are actively seeking out vehicles in the pre-owned market.  According to the Australian Automotive Dealers Association (AADA) dealerships have experienced a welcome boost in used car sales since the pandemic started in early 2020. With increased demand for used cars, dealers are offering sellers more competitive buy-backs. With a huge range of used vehicles available on the market, finding a great deal on your next car has never been so easy. Used car sales Frankston right down to used cars Mornington Peninsula have become increasingly popular searches among car buyers. 

Where To Find Your Next Used Car

As we head into the second half of 2022 dealerships are experiencing more customers than cars, driven largely by the demand for used cars. Customers are desperate to hit the road now and are simply unwilling to wait for new overseas imports. If you’re in the market for a car, the pre-owned route presents many opportunities. Browse used cars Seaford and used cars Frankston to find your next drive or visit Westernport Ford.

The Official Blog of Westernport Ford

At Westernport Ford, you may have noticed but we love cars. We also love giving advice, tips and tricks we've learnt about our cars over the years. Check out our blogs for the latest industry news and updates.
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