June is historically the biggest month of the year for new-car sales amid a big push in the lead-up to the end of the financial year. But severe stock shortages will likely slam the brakes on sharp deals. 

Severe stock shortages in the lead-up to the end of the financial year – and indefinite delays among some of Australia’s most popular cars – are expected to slam the brakes on super-sharp drive-away deals in the run up to June 30.

The car industry has struggled for months to keep up with unexpected demand as Australians treat themselves to a new car, rather than spending money on overseas holidays.

International travel restrictions caused by the coronavirus crisis have coincided with a sharp rise in demand for new cars, especially getaway vehicles such as utes and four-wheel-drives.

Compounding the shortage of new vehicles: interruptions to production caused by delays in semiconductors, which are essential to most modern cars.

Some car companies such as BMW, Mercedes and Peugeot have begun deleting some features so they can keep assembly lines moving, but most major automotive brands are simply slowing their production lines rather than removing content from their vehicles.

When asked if June 2021 would see a return to sharp drive-away deals for the end of this financial year, the boss of Kia Australia, Damien Meredith, told media during a roundtable conference: “Deals aren’t going to happen, it’s just the human nature of things. Why would I discount a car … that I can’t deliver to you for six months? It’s just a simple supply and demand curve unfortunately.”

Although Kia is not alone in maintaining retail pricing rather than offering super-sharp drive-away deals, Kia says it hasn’t done a retail adverting campaign since September 2019.

“It would be hard to fathom why (discounts) would happen because the supply situation would disallow it,” said Mr Meredith.

The senior automotive executive said the car industry needs to be better at being “more transparent” with customers “as to where our production is” and provide customers with more accurate estimated arrival timing of new vehicles.

However, the executive had a warning for anyone waiting for new cars to return to free supply or oversupply.

“I can’t see it being resolved this year,” said Mr Meredith. “I think there’s at least another six months of uncertainty and not getting transparency with (future vehicle) supply.”

Mr Meredith said vehicle production around the world was being slowed by “the whole component industry”.

“It’s messy,” said Mr Meredith, “and I don’t see any clarity for at least the next six months. I think the rest of the year it’s going to be really difficult.”

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