The top 5 lessons you need to know about new-car shortages in 2021
Buying a car today isn’t the same as two years ago, when a flooded market made it a buyer's paradise. Here's what you need to know…
How do you tell a story about cars that don’t exist, and may never? And what do you expect if you just put down a deposit on one?
Below are the top five lessons I’ve learned from the biggest new car market inversion I’ve ever witnessed.
In short, new cars are in short supply, because they can’t get the computer chips required for systematic control of the widgets.
This is because the car industry were bastards to the chip makers, and there was an explosion of consumer demand for laptops and gaming consoles when everyone started living and working from home, 24/7.
Today, demand for new cars out-strips supply, and dealers are being complete whingers about it, generally. Because they’re short-term thinkers, as opposed to relationship builders. Carmakers are ramping prices, too, and blaming it on COVID-inspired inflation.
Had a guy the other day. He ordered a Triton GLX manual back in December 2020. He was told to expect delivery in May, 2021. May rolled around and he’s hearing crickets. Maybe June, the dealer says.
June came around and still no three-pedal GLX in the driveway, with deafening silence until July when he got a message, which is not what you want to hear after waiting eight months for a ute, with the dealer holding your deposit.
The message says, essentially, ‘Mitsubishi’s discontinued the GLX manual - do you want an auto?’ I would be flat-out livid, and our consumer here certainly was. This is just one obscure, unforeseen knock-on effect of the microprocessor shortage that’s gumming up new car manufacturing so significantly.
LESSON 1: Timelines are stretched
If you order a car and there’s no production date allocated to it - you might never get it. So, ask about that when you order.
If you’re buying a Hilux, for example, there’s going to be a tech upgrade some time between now, when you order it, and some time down the track when they can deliver it to you. Nobody knows how much extra that’s going to be. So, you have to commit to buying it without knowing the price, and hope the dealer’s not going to shaft you with that.
Incidentally, according to a confidential communication between Mitsubishi Shitsville and its dealers, which just landed in my lap from the leaking ship we know as the SS Retail Apparatus, the Express van is the only Mitsubishi in stock now.
Outlander is simply listed as ‘not available’, as the MY21s are all built. ETAs are ‘up to’ two months on Mirage, three months on Eclipse Cross, four months on Pajero Sport, five months on ASX, and six months on Triton.
This is typical of many brands.
LESSON 2: Dealers will take anything
If you’re shopping for a car now, do not make this mistake. If you’re at dealer A and he says: ‘We might be able to get Car B of your dreams in for you by Christmas…’ he’s probably not bullshitting you.
So, I get that Christmas is only four months away, and you want instant gratification. We all do, especially in 2021. But if you get all indignant, have a hissy fit, storm off to the next dealer, and let it slip that ‘those incompetent dicks down the road’ can’t source your car until Christmas at the earliest, do not be surprised if the sales dude says:
‘We can get these by the start of November, I’m pretty sure.’ You’ll be overjoyed, won’t you? It’s just what you wanted to hear - seven weeks earlier on delivering your new car. The problem is solved, supposedly. But wait.
You have to understand that all dealers are in the same position in terms of these supply constraints, and some dealers, desperate to accrue your deposit and get you (as they put it) ‘off the market’ - they’re just going to tell you whatever you want to hear. Their mission is: Signature and a deposit - job done.
Do not be surprised when November rolls around and you learn there’s been some unforeseen delay. Like, who knew? The problem here is not dealer competence, it’s factory output. And unfortunately, the dealer who regards the truth to be more disposable or malleable is more likely to win your business.
My default position is always: Do not hand the sales guy any information he can use to close you, by appeasing you with his charming bullshit. This is just that.
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LESSON 3: End-of-productions are final.
This is an extension of lesson one, and the best example is Kia Stinger. I’m told by trusted sources in the retail domain that if you sign on the dotted, and put down a deposit, today, that the dealer will take your money, but the factory is unable to allocate a production date to your car.
This is an unprecedented knock-on effect of the chip shortage. But the upshot is, it seems certain Stinger will bow out by Christmas 2022. Bad luck for you, therefore, if they don’t get around to allocating your order to production.
On cars where the death warrant is signed on that model, such as Stinger, get in now, if you really want one, because if you wait, it might never happen.
It still might never happen, even if you act now, because nobody thought this novel marketplace inversion would go on quite this long, without an end in sight. You’re just maximising the balance of probability if you jump now. But brace for impact anyway, because you might well be disappointed.
LESSON 4: Advertising is not your friend
Carmaker websites are useless. I look at the websites of the most popular brands, often enough. And none of them, to my knowledge, give any particular airtime to the inability to supply the car you want in a timely fashion.
There’s simply no upfront information about delays, or assistance for you to make an informed decision in relation to that. It’s an ambush.
Let’s just let that sink in. The core business of a carmaker is selling cars. If you can’t supply them, you can’t sell them. Why is it, if you walk into Bunnings, or Rebel Sport or JB HiFi, they’ll tell you what you’re looking for is out of stock, openly and honestly, and perhaps suggest alternatives?
If you can do that with timber (because of a timber shortage), or new computers (chip shortage), or that special pair of AirJordans you badly wanted, why can you not do it with cars? What is the special dispensation to lie by omission about availability, for cars? Isn’t taking a deposit, for a car you can’t guarantee will be made, just a bit unethical? Of course, the ACCC remains in hypersleep on this.
At the very least, if I get excited to own a Stinger, or whatever, using the carmaker’s website, am I not then set up for massive disappointment when I come face-to-face with some dealer who says it can’t happen?
It’s the Wonderbra effect, only with cars. And it’s not a mechanism for a strong relationship with that brand, into the future.
LESSON 5: Features compromised
Don’t be surprised if production corners are cut, and the car you get, eventually, lacks some features. Most features are microprocessor controlled, and without the microprocessors, they don’t work.
You might, for example, not get auto wipers on a car you’d normally expect to see that feature on. I’m looking at you, Kia Carnival Platinum. I think this is going to affect BMW as well, in some ways.
I heard a whisper late last week, which I am still chasing down, but which I have been unable to confirm, to the effect that Audi is severely impacted in this way, and they’ve taken the decision not to install sunroofs from some models. I also heard, from the same source, that if you buy a new Audi over the next few months, you might only get one key, as opposed to the usual matched pair.
As I say, this is unconfirmed, but if it is on the money, that’s hardly a premium experience, is it?
They’re the top five impacts on commercial dynamics that I have observed recently, for new car buyers. Just thought you should know, given you’re scouring the website.
At the moment, unfortunately, delays are the main dish on this car-buying menu, and in a significant proportion of cases, it’s being served with cold shoulder (after you order) and delivered on a bed of complete uncertainty.
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