7:43 am, January 13, 2023
A growing number of car dealers are reporting rapidly improving new car supply as manufacturers begin to put up targets.
Car Dealer has heard from a cross section of motor trade bosses who have explained manufacturers are telling them new car production is dramatically improving – and faster than predicted.
Peter Smyth, Swansway Motor Group boss, told Car Dealer that he was ‘surprised’ at the swing in new car supply he is seeing with his franchises.
Swansway operates dealerships for Audi, VW, Jaguar Land Rover, Peugeot, Seat and Honda.
He said: ‘Audi has told us that from quarter two supply will be back to normal. There is a surprising amount of stock around and a lot more than I thought there was going to be.’
He added that Land Rover supply was also improving and that Honda looked set to be getting better in the second half of the year.
‘From quarter three, most manufacturers look like they will be back to normal from what we are seeing,’ he added.
Car manufacturers have been battling severe disruptions over the last two years, first with Covid hitting production and then parts supply problems.
The well documented semiconductor shortage caused major delays for car makers which they struggled to battle back from last year.
This has led to long waiting times with many new car buyers holding on for more than a year for their new car.
Tony Roberts, who runs Magna Motor Group representing Mazda, Honda, Nissan and Subaru, said supply with his manufacturers is much better.
He said: ‘We are certainly being asked to re-evaluate our marketing activities, and return to a position more reflective of the world pre-Covid and semiconductor shortages, which is perfectly reasonable in my opinion.
‘It’s fair to say Mazda have targeted quarter one to pre-pandemic levels, and that their supply is approaching the level required to achieve such.
‘Honda supply is improving on certain models, however they have wisely targeted order take activity on those that are still some months away to keep the sales funnel full.
‘Certain Nissan models are coming through much better now, especially the Qashqai and Juke, which are key vehicles for Nissan and far more readily available.’
Another leading car dealer group boss, who didn’t want to be named, said that supply of VW Group new cars were much better, but Stellantis cars were ‘still a major problem’.
Car Dealer exclusively revealed in December that Stellantis was asking dealers to register cars stuck in ports to customers. The dealer boss told us that this was still the case and ‘many of my cars are still there’.
‘We registered cars in November in ports to customers and we still haven’t seen them – Stellantis problems have not gone away, that’s for sure,’ he said.
Mark Lavery, CEO of Cambria Automobiles – who will be the headline speaker at our Car Dealer Live event – said the new car supply for the brands his group represents is ‘no different to what was expected’.
Cambria represents luxury car makers including Aston Martin, Rolls-Royce, Lamborghini, Bentley and McLaren. His firm also represents volume brands for Stellantis, Ford, Mazda and others.
He told Car Dealer: ‘New car stock year-on-year is far better than what it was. Land Rover is still tough, Ford has some issues, as does Stellantis, but Mazda is better.
‘In the high luxury space there are still long waits for Bentley, Rolls Royce and Lamborghini models. There are some Aston and McLaren models on the ground, but not many.
‘The new car supply is no better or worse than I expected at this time of year. New car sales have gone off the boil a bit coming into the new year, but used cars are flying out of the blocks.’
Neil McCue, chief operations officer, at Snows Motor Group said he has not seen any signs of improving supply with the brands he represents. He will also be appearing on stage at Car Dealer Live.
Snows, a south coast dealer group, represents a host of Stellantis brands, Kia, Toyota, Lexus, Mazda, BMW and Mini, among others.
‘Supply from the brands we represent is still a challenge,’ said McCue.
‘It’s no way back to normal and some cars are still facing lead times of well over a year. It’s still a challenge to get a lot of product and as a result we’ve not seen any change to targets.
‘As a group we are focussed on keeping the order banks full. It’s certainly not back to normal yet.’
Paul Hendy, CEO of Hendy Group, said he hadn’t seen much of a change in supply either, but added it was ‘early days’.
Vertu Motors boss Robert Forrester told the Motor Trade Radio podcast that ‘barring the Chinese invasion of Taiwan’ he thinks there will be a recovery in the market in 2023 led by improving supply.
He said: ‘The VW brands look to be seeing better supply, we certainly saw that in Q4, but I think there is still pressure in Stellantis, whereas Ford is pretty good.
‘There are a lot more positives than negatives on supply. I don’t think it is going to race away rampantly and I think the mix will be interesting as there is certainly a slow down in electric vehicle thinking.
‘But I think the supply side will improve without destroying used car values.’
Jim Holder, editorial director at What Car?, said he has heard the Korean makers, Dacia, BMW, Audi and Tesla are all reporting good new car supply.
He told Car Dealer: ‘The mood music on supply is definitely changing, but I’d be surprised if it returned to normal, pre-Covid levels this year, especially given the inconsistent supply of EVs in recent months and years.
‘As supply opens up, though, it’s interesting to note that talk of dealer targets is returning so soon.
‘Manufacturers and dealers have benefitted from increased margins as demand has outstripped supply, and the expectation was they’d be sophisticated in trying to manage that situation as supply opened up. This suggests that won’t be true in all cases.’
Steve Fowler, editor in chief for Auto Express, added: ‘Looking at some of the deals that are coming through, it’s clear that manufacturers and their dealers are getting back into sales mode as more stock becomes available – that will only increase through 2023.’
The new car supply issues of the past few years have had other payoffs – it has certainly helped keep used car prices high.
With many customers unhappy to wait for a new car, they turned instead to the used car market where a lack of supply and high demand kept prices high.
Dylan Setterfield, head of forecasting strategy at Cap HPI said: ‘We have already seen significant improvement through the latter part of 2022 for several major manufacturers.
‘The supply situation remains very vehicle specific and lead times of 12 months or more still remain for some cars.
‘We have already factored in continued new car supply improvements into our forecasts and the outlook for the next 12 months is assumed to be comparatively worse than the following two years, where we expect to see more positive used car price movements than normal, as reduced new car registrations through the pandemic translate into lower levels of used car supply.’
What are you seeing in your dealership? Are manufacturers putting your targets up? Let us know by emailing the Car Dealer team here.
Car Dealer Live – the future of the car dealer – exclusive conference features talks from leading car dealers, Google and Auto Trader among much more. Find out the full event details and book tickets.
