New car availability hits low point due to computer chip shortages

"The semiconductor shortage is putting people on wait lists."
"The semiconductor shortage is putting people on wait lists." Photo credit: Getty Images.

By Phil Pennington of RNZ

The number of new cars available for sale in the country has never been so low.

Stock is at a quarter of usual levels, while the global crunch on carmakers - due to a shortage of computer chips - shows no sign of easing.

In the US alone, production is down 1.2 million vehicles since the start of the year and, as in this country, demand is up.

Motor Industry Association chief executive David Crawford is tracking what is happening here.

"Normally distributors would be holding three to four months supply of vehicles," Crawford said.

"At the moment, the stocking levels are about a quarter of what they would normally be. So they're the lowest I've seen."

On top of that, buyers are driving off with 9000 cars a month, up almost 50 percent on last year, and above pre-pandemic levels of 8500. Tradies are adding another 4000 light commercials a month to that, up a third.

On the supply side, carmakers are parking up new vehicles while they wait for chips to fit into them, or, in the case of Peugeot, reverting to analogue speedometers instead of digital.

Crawford cannot see an end in sight yet.

"The semiconductor shortage is putting people on wait lists.

"Factories are either suspending production or reducing production rates to match. So that means that the supply of vehicles is slowing down but buyers' interest remains strong."

Despite this, things are fairly steady on the price front, the Motor Industry Association said.

Though that was news to Rob Smith of Greytown, who is trying to buy a new Hyundai.

"I've been told that the earliest they can expect delivery is August," Smith said.

The dealer said that they expected there to be an increase in the price when the new model landed. He did not know how much.

"For the Honda dealers, their stock is not due to arrive till September."

A market hit by chip ripples is also throwing up some curly outcomes: Murray Scott of Lower Hutt was just in at the dealership where he bought a Holden at a discounted price last year, before the stock squeeze.

He heard tell that cars bought then might even be worth more now.

"An example of that was a Holden Colorado - there's some talk of the sale price from 12 months ago still being achieved, and then some," Scott said.

"For somebody who bought in that timeframe - such as myself, I bought an Arcadia - that's good news. The values are hanging up there from what we were used to, when you looked at an immediate, substantial depreciation as soon as you drove a car off the lot."

There is a point of downward supply pressure: The rental car industry is buying way below its pre-pandemic numbers - just 2000 vehicles so far this year, when it normally totals 20,000 annually.

The downside of that softer demand is the used car market has not got the flood of 15-20,000 ex-rentals that usually start getting sold off around Easter.