Top 3 Reasons for New Car Delays PLUS When They Might Ease

Top 3 Reasons for New Car Delays PLUS When They Might Ease

Australians who have tried to buy a new car in the past two or three years have faced long wait times for the models they really want. The COVID-19 pandemic has had wide-reaching changes all over the world, and car buyers have unfortunately seen major delays. In a survey from WhichCar that spoke to dealers, brokers and buyers, data showed the average wait time for a new car almost quadrupled between 2020 and 2022. So what’s behind the increasing delays and prices? If you’re in the market for a new car then there are a few main reasons you could be seeing price hikes and delivery delays. Here are our top 3 reasons there is a longer than usual wait time on new cars.   

The semiconductor shortage was one of the first big casualties of COVID-19, and it continues to be the top reason for most new car delays. It’s a huge problem for the modern car industry where vehicles often have thousands of microchips on board.

The problem can be traced back to the start of the pandemic when shutdowns and quarantine periods were at their harshest. Many semiconductor manufacturers were forced to pause production. When they did fire their machines up again, they were reducing costs by minimising inventory and matching their production to real orders. 

Carmakers, anticipating a big dip in demand for new cars, dialled back their own orders. But, what actually happened was new car orders in Australia went up. In fact, 2021 saw a 68% increase in new car sales over the previous year! With Australians swapping their overseas holidays for road trips, and public transport for their own cars, the semiconductor industry simply couldn’t keep up with the changing market. This created delays due not only to the new demand, but also extended the original wait times that were due to shutdown periods.

The way Australians get around has changed a lot in the past few years. We’re driving more, avoiding public transport and swapping our overseas holidays for road trips. When you put it all together, it has caused a big spike in demand for both new and used cars. Right on the heels of a pandemic and its economic impacts, the switch has taken manufacturers across the world by surprise. The changes are even more pronounced in Australia. Demand is stronger than ever, with many new car sales records being broken around the country. 

We’re also seeing more drivers heading to the growing Crossover and SUV segments, which now make up about 50% of all car sales in the country. Manufacturers are in the throes of updating their offerings and tech across this range, adding to the delays customers are seeing.

Changing demands in a market that are experiencing unexpected growth is causing natural delays as manufacturers race to keep up.

It’s not just manufacturing that has taken a hit during the pandemic, logistics and supply chains are also struggling to catch up. The number of car-carrying freighters coming to Australia has halved during the pandemic, with shipping companies eager to avoid Australia’s long quarantine times and to avoid new COVID outbreaks. 

Shipping has also been a struggle due to the changes in buyer demand. Lots of people are looking towards larger cars for their new purchase, and it means that space on car-freighters now comes at more of a premium. Many freighters have even had to be modified to accommodate the larger cars and vans we’re buying.

The delays and wait times facing the freight industry are directly affecting new car wait times for buyers all over Australia.

The short answer is yes! In the coming months, buyers will see wait times on new cars begin to decrease. In fact, wait times are already trending downwards. Manufacturers are rapidly increasing production to work through order backlogs. Sean Hanley, Toyota Australia’s vice president for sales and marketing, predicts that wait times would drop on most Toyota models after March, the exception being the RAV4 Hybrid due to its immense number of backorders.

“While I don’t see an immediate reduction of the wait times in the foreseeable quarter, please be sure we will continue to work through that and keep our customers updated,” Mr Hanley said about RAV4 Hybrid backorders.

Tony Weber, CEO of the Federal Chamber of Automotive Industries, also expressed delivery times would ease this year, “The blockages in the supply chain should start to unravel in 2022 and hopefully that should mean Australians don’t have to wait so long for some of their vehicles,” he said.

Some of the data we are seeing on new vehicle wait times has been skewed by the models people are ordering in the largest numbers. Newer EV and Hybrid cars are attracting record numbers of pre-orders, meaning some models are being sold faster than they can be produced. Demand for a handful of models is throwing the calculations out and making the average wait times look worse than they are for most cars. When in doubt, talk to your dealer about the expected wait times for the car you want. They’ll be able to give you advice about which models they have on hand and which ones have a bit of a longer queue.

If you’ve been looking at buying a new car, now might be the time to pull the trigger and place your order. Waiting times for new vehicles at the start of 2022 are down from their high in December 2021, which means we’re expecting to see car delivery times continue to fall throughout the year. 

Talk to the team at Downtown Toyota about our range of new cars and we can help you figure out how far away your new vehicle will be.