Australia’s biggest motor vehicle seller for the past two decades, Toyota, has signaled when it thinks the stock shortage will end and a glut of new cars could return.
Toyota, the biggest seller of new cars in Australia, and which has the most buyers with the longest wait times in the industry, has provided a rare glimpse into when delivery delays will end and price competition could back to the showrooms.
While most industry experts predicted two years ago that the stock shortage would only last 12 to 18 months, their forecasts appear to have underestimated the crisis.
Toyota, which has been the market leader in Australia for the past 19 years in a row and is on track for its 20th consecutive annual victory this year, has told its national dealer conference that the industry will not return to a pre-COVID situation. . normal” until the end of next year.
Toyota Australia sales and marketing chief Sean Hanley told the national dealer conference in Cairns this week that production will continue to rise over the next 12 months, but the company also expects demand to decline at around the same time.
Hanley reportedly told the Toyota dealer conference that “free sourcing” (industry jargon for when dealers have ample showroom stock to sell, rather than wait for shipments to arrive) could occur at the second half of 2023, which is later than expected.
The Toyota executive also speculated that rising interest rates could dampen new car sales around the same time.
If Toyota’s forecasts are correct, it means wait times will evaporate as dealers overstock, in the process giving new car buyers better bargaining power.
For the past two years, most new cars have been sold at full retail price and with higher delivery fees (which, contrary to the description, is simply another layer of profit).
Data from financial analyst firm Deloitte shows dealer profits before COVID fell to an average of 0.9 percent of annual turnover.
Last year, new car dealers’ profits soared to an average of about 4 percent of annual turnover, while the best in the business rose to 6 percent.
As reported earlier this year, figures provided by Deloitte showed that in the run-up to the 2019 pandemic, new car dealers on average made a profit of $600,000 a year, but last year the average profit per dealership was $3 million.
While Toyota’s latest forecast is of course subject to change, it is the first time that a major car brand in Australia has indicated when the latest new car shortage might end.
Meanwhile, Toyota is on track to post record sales in 2022 as new-car buyers gravitate toward brands they trust in uncertain times.
Toyota says its current lead times, which range from six months to two years for popular models like the Toyota RAV4 Hybrid, aren’t solely due to production outages.
“What nobody talks about is the increase in demand,” Hanley reportedly said at the Toyota dealer conference.
Mr. Hanley told the audience that despite the difficulties of the past two years, Toyota is on track to produce close to 10 million vehicles worldwide this year: 3 million in Japan and 7 million outside of Japan. Japan.
The Toyota Australia veteran also called on dealers to be patient and keep customers informed “during these unprecedented times.”