Australians looking to buy a reasonably priced car may have to wait another two years for the price to drop. Still, it is unlikely that the price will drop to the pre-pandemic price.
Ajay Bhatia, managing director of Carsales Australia, told The Epoch Times that car prices have peaked and will continue to rise for the next two years.
“Everyone speculates what will happen in 2024, but prices can remain high in 2022 and 2023,” he said.
The global supply shortage of semiconductor chips caused by supply chain problems has also surged in the value of used cars over the past two years, 40% during the pandemic, as consumers paid a premium price for immediate access. Carsales said it had risen to their purchase.
A used car is “quite low kilometers” and will be higher than a new car of the same model if it is manufactured within a year.
“I actually bought the car nearly two years ago and it was just manufactured next month,” said Batia, showing the open range of job orders and boosting the used car market.
Batia said supply chain problems began to ease later this year and will recover throughout 2023.
“But there is always a delay when it comes to prices,” he said. “If someone is working hard to buy a car, they have to work hard for a very long time.”
Consumers worried about further price increases due to the current inflation problem can be confident that it will have little impact.
“Most OEMs (Original Equipment Manufacturers) are already raising car prices. Inflation has already been hit. [the car market]”Batia said. “It’s already happening. If anything, car prices will be a major factor in rising inflation.”
However, Australia does not have the capacity to manufacture domestic vehicles, so customers are completely dependent on foreign manufacturers to solve supply chain problems.
A KPMG Report US used car prices were announced in late December and were expected to fall by 20-30% once supply and demand normalized.
“The question is not only when there is enough supply to meet normal demand, but also when the supply catches up with the cumulative shortage that continues to build up,” the report said.
The blockade of COVID-19 also drastically changed the way consumers buy cars, and many people gathered on websites such as Carsales because they couldn’t go to the dealership.
“And at that point traffic began to skyrocket. Today’s traffic is still much higher than the pandemic level,” Batia said.
In addition, the COVID-19 pandemic has triggered the emergence of many factors affecting vehicle demand, such as avoiding public transport, increasing government-sponsored savings and improving economic conditions with low interest rates.
The blockage also means that consumers spend more time looking up information about their dream car, and according to Carsales’ research, people spend an average of three to four times longer on research. increase.
Meanwhile, Batia said it would accelerate its push to hybrid and electric vehicles if current record high fuel prices remain high.
But he said the affordability of EVs remains a barrier to entry for the average Australian.
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Rebecca Zhu is based in Sydney. She focuses on Australia’s economy, property and education. Do you have a hint? Contact her at [email protected]