New car sales in Mount Gambier are booming, with dealerships struggling to keep up with demand.
A combination of COVID-19 factors have led to stock shortages and lengthy waits, according to dealerships. Car salespeople at both OGR and Noel Barr Toyota are working hard to fill customers’ orders, however stocks nationally have been depleted.
OGR Dealer Principal Bryce Roberts said there had been an increase in global demand as well as shortages due to COVID-19 lockdowns.
“These global supply chain issues relate to not only componentry and manufacturing but also shipping and delivery,” he said. “Ports globally are all haemorrhaging with the amount of freight and logistics moving through their channels.”
Mr Roberts said the real impact of the supply chain began late last year when dealers were not able to forward order stock but were only being allocated enough vehicles each month to fulfil sold vehicle orders. “Hence there is no stock on the ground now,” he said.
“Dealers have very limited access to stock as we are only filling mainly sold orders with a wait time of from as little as two months to as long as 12 months in advance.
“There are normally manufacturers who would have thousands of cars sitting on grass at all major capital cities – however today there is next to no vehicles available in compounds to grab for stock or fulfil sold orders.”
Mr Roberts said most customers were understanding of the situation. “Due to global restraints and unusual buying behaviours there are extended lead times to fulfil sold orders, however when customers require a unique build or configuration extended time frames to supply will usually apply,” he said.
“New car sales had been dwindling across Australia over the past three years, having said this, the current new car sales figures are reflective of times gone by when the market was at its peak.
“To put this in perspective, at a recent Kia dealer only factory demonstrator auction, the recently released Kia Sorento, that has just been announced the 2021 Drive Car Of The Year Award, and also won the CarSales 2020 Car Of The Year Award, one vehicle was being sold under the hammer for up to $8000 over the recommended retail driveaway price.
“This is totally mind-boggling when you consider you still need to pay stamp duty, registration and luxury car tax to on-sell the vehicle to a new owner.”
Mr Roberts said, even though there had been restraints on new car supply, OGR had continuously had over 100 plus used cars in stock throughout the whole COVID pandemic period.
“Used cars on the whole have all seen a price increase of up to 30% from pre-COVID prices on certain model lines,” he said. “OGR’s trade-in policy has seen us exceed customer’s expectations on many occasions as to their vehicle’s expected trade in value. “This has increased the confidence in buyers wanting to trade into a new car.”
The situation is also being repeated at Noel Barr Toyota, where Sales Manager Adam Salmon is overseeing a heavily depleted display yard. “Usually, we have a selection of vehicles coming in to stock to display in the yard for our customers to view, test drive and purchase,” he said.
“Then we have a number of vehicles that have been built specifically to fill customer orders. “In the current climate, our incoming cars are being sold before they reach our yard as demand is exceeding supply.
“This means there are limited cars to buy from the showroom floor; but there are still opportunities for our customers as Toyota are telling us that we will receive more vehicles this year than we did last year.”
Mr Salmon said he was looking forward to “some exciting new models set to arrive later in the year” with the All New Kluger and the highly anticipated Landcruiser 300 series. “It looks like we are going to be very busy as the year goes on and our supply continues to increase,” he said.
“That will be a real boost as stock has been difficult to access since June 2020. “Initially it was a supply issue due to COVID19; as car manufacturers cut orders back with a forecasted downturn at the beginning of the pandemic.
“It turned out that it was not the case at all for the automotive industry and now our stock shortages are due to demand far exceeding supply.” Mr Salmon said accessories had also been affected by COVID-19 for a number of reasons.
“This had slowed down the delivery of vehicles that have arrived at our dealership, but cannot yet be delivered until they have all of their accessories fitted,” he said. “Our percentages are much the same as last year for our new vehicles – we just have an increase in demand.
“But our used car department is running at 25% capacity compared to last year. “In extreme cases some model lines are six to seven months from order, but most model lines are three to four months from order.”
Mr Salmon said most of the dealership’s customers were “very understanding of the current situation”. “We are being very upfront with expected wait times and our customers are appreciative of the transparency,” he said.
“It’s hard to judge exactly the reasons why queries are up, but demand is certainly high at the moment. “This would also have a lot to do with the current government instant tax write off incentives encouraging businesses to spend, in what was forecasted to be an economic downturn.
“We have not seen this downturn at all. “We have faced similar uncertainty in the past with supply; due to natural disasters and other economic issues. “But this has resulted in a lower supply of stock during a normal period of demand.
“Now we find ourselves in a situation where we have a higher supply of stock; but with a longer wait time and a higher demand. “We have no doubt that this situation will level out in time and we will be able to move past it; but at the moment we have to put the focus on managing our customers and their expectations.”