Skip to main content

The global shortage of computer chips has extended to Australia, with the flow on effect leaving buyers facing wait times stretching into 2022.

The shortage has been so significant that the wait time for purchasing a new car in Australia has ballooned out to longer than six months for some models, according to the Motor Trades Association of Australia (MTAA).

“Delays for some models have been pushed out to double the usual time, if not longer,” MTAA chief executive officer Richard Dudley said.

“If you can’t get hold of an electronic control unit, that might prolong the time it takes for a vehicle to be repaired,” he said.

The delay has seen a significant shift in the price of used vehicles, with drivers on some occasions paying more for a used car than a new one of the same model.

“We’re having used Landcruisers selling for more than new ones,” CEO of the Australian Automotive Dealer Association (AADA) James Voortman said.

“All of these issues are creating an environment where there’s significant demand, but supply is not keeping up.”

Meanwhile US automakers are seeing a ripple effect of production line slow-downs and shut-downs due to the ongoing computer chip shortage.

“Chips are everything,” says Neil Campling, media and tech analyst at Mirabaud.

“There is a perfect storm of supply and demand factors going on here. But basically, there is a new level of demand that can’t be kept up with, everyone is in crisis and it is getting worse.”

Ford recently cancelled shifts at two car plants and said profits could be hit by up to $2.5bn this year due to chip shortages, while Nissan is idling output at plants in Mexico and the US. General Motors said it could face a $2bn profit hit.

Meanwhile unprecedented demand back home is also responsible for long wait times, as the true effects of the pandemic take hold in the Australasian region.

COVID-19 altered vehicle replacement cycles in 2020 as initially the sale value of second hand vehicles plummeted in March, April and May which caused many fleets to defer replacement cycles for a year. This has doubled the demand in 2021 as organisation’s seek to replace two years of vehicles.

“Organisation will need to work closely with their chosen vehicle manufacturer to commit to future orders if they wish to have certainty of supply and whilst this seems easy, it’s difficult for some organisation’s to be certain of economic conditions with Job Keeper ending in just a few days time,” AfMA Executive Director Mace Hartley warns.

“They will need to reassess their replacement plans due to long wait times for some models, which provides an opportunity to change OEM’s as there are a number of new models scheduled to be launching during next nine months.”

Have you suffered any major delays with your fleet vehicles? Send us an email via [email protected] to share your thoughts.