What is the cause of the shortage of new cars in Australia? | Augusta-Margaret River Courier


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You don’t expect to hear of a new car shortage when there are so many long stretches of car dealerships with every make and model spilling out onto the grass of a crowded garage.

Although this is a situation Australia finds itself in and is in good company with other parts of the world.

Another symptom of the pandemic is the shortage of new cars, with the shortage expected to last at least a year and subsequent demand for used cars pushing up the price by 30% over pre-pandemic prices. With some car dealers citing a nine month wait for a new car, it’s no surprise that used car loans in Perth are being explored by a diverse customer base.

The delays of new cars are multi-faceted with logistics issues and a shortage of semiconductors contributing to wait times as various countries comply with the unique border restrictions and employment-related working conditions brought on by the pandemic.

Semiconductors are a key part of every car, powering a variety of functions including safety functions, sensing, power management, in-car controls and displays, and are often referred to as “the brain of the car.” “.

Due to the complexity of these semiconductor designs, there are only a limited number of places in the world that are responsible for engineering these parts.

Fleet rental company Eclipx has seen a 42% increase in car rental extensions due to the shortage and rental contract holders who are unconvinced they can find a new car or occasion when they return the rented vehicle.

Julian Russell, CEO of Eclipx, told Australian Financial Review that the sharp price increase is a prime example of supply and demand depending.

Japanese auto heavyweights like Toyota, Nissan and Honda have even felt the peak pressure in a decision to manufacture 1.3 million fewer vehicles this year.

This decision will mean that these manufacturers will sacrifice 5% of their annual production, a situation unprecedented in a still stable automotive industry.

It will be interesting to follow the shortage of new cars as more professionals continue to work from home and no longer commute every day. There are also a number of carsharing services suitable for a wider population of Australians.

Over the past decade, Australia has shut down some of the country’s largest auto production lines, including Ford, Holden, and Toyota.

This decision and the many that came before it were made because of the consistent quality and lower price that could be achieved through offshore production lines.

As the pandemic recedes, dependence on auto exports could be seen as unfortunate.

With the used car inventory shrinking due to the limited supply of new cars, rental cars could very likely be the next market to experience a shortage, one of the few options available to Australians.

The bulk of rented cars are facilitated by extended new leases on behalf of an employer, which is a common benefit for government and NGO organizations.

Goldman Sachs predicts the auto industry will be one of the biggest losers for 2021, with China and the UK also forecasting a late second half and facing higher employee representation needed for downturn caused by the bottleneck of the sub-conductors.


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