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The Challenges Facing the Automobile Industry in Australia

4/3/2022

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​As the world is returning to its pre-pandemic state, people are becoming more interested in getting new cars. However, car dealers tend to be struggling to offer car buyers the new cars they want. Tasmania is actually better off than many state and territories with an average waiting time of just 63 days compared to the national average of 112 according to PriceMyCar’s delivery date analysis.
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This is due to a wide range of issues that will be discussed below:
  • Low supply of cars
In most places around the globe, there is a shortage of car supplies. At first, the shortage was caused by Covid-19 which made it difficult for car manufacturers to work at their optimal level. However, another important problem is the shortage of chips. As chips are scarce, it is increasingly difficult for car manufacturers to produce high-quality cars that car buyers need. Of course, this problem is not peculiar to Australia.
Even if you are interested in buying used cars, you may still have challenges with getting them. This is because many car owners are not willing to let go of their existing cars. Even those that are ready to sell their vehicles will only do so at exorbitant fees… sometimes more than the equivalent new car price!
For the Tassie locals, start by checking the price on a new car in Tasmania and other areas within the country. Afterward, look for a reliable car dealership and check the waiting times.
  • Increased competition
For car dealers, increased competition is a challenge that cannot be overlooked. Today, car dealerships are springing up in different corners of the country. While this is beneficial to the buyers, it is disadvantageous to the existing dealerships. Now, the dealerships have to compete with lots of others to get the attention of the would-be car buyers.
Generally, a potential car buyer can browse through a listing of numerous car sellers. Unless a dealership stands out, it will be difficult to attract buyers. Therefore, car dealerships now need to spend more on ads and other things that can give them a competitive advantage over others.
  • The need to change to electric vehicles
Unless you live under a rock, you would have heard about electric vehicles. The truth is that these cars could bring a dramatic change to our environment and boost our overall well-being. However, there is still scepticism about the adoption of EVs in the country.
Firstly, the government authorities are not doing enough to encourage people to make the shift from fossil fuel-powered vehicles to EVs. Secondly, many individuals still fear the battery capacity of electric autos. Thirdly, many car dealerships are uncertain about whether they should start offering these cars or not. This is because they doubt the possibility of selling the cars as quickly as they would like.
Although various steps are going on to tackle these challenges, they are still affecting the auto industry in Australia. Nevertheless, we believe that improved battery technology, government programmes, and incentives can speed up the shift to EVs.
  • Changing technology
Although changing technology is a positive phenomenon, it has brought lots of issues to the auto industry. This is because it is difficult for lots of auto industry players to stay up to date with the changing technology.
It takes lots of time and money to keep up with the changing technology in the car industry. But to be competitive, key players in the auto industry have to follow the technological changes.
  • Cost of getting sales
Due to the increased competition, car dealers cannot afford to sit back and expect buyers to come to them. They need to invest in acquiring leads. Unfortunately, leads don’t automatically translate into sales as many people will check autos without buying them. According to a report, a few dealers are forced to spend more than $600 on ads before selling a single car.
If you are into selling cars, you must keep track of how much you spend on ads. Don’t lose sight of the leads and, most importantly, the paying customers.
  • Covid-19
In addition to the problems above, we cannot help but mention the issues associated with Covid-19. The pandemic has affected the purchasing power of some buyers. Besides, some potential car owners now have lesser needs for personal cars as they work mainly from home. Even lots of small business owners are frustrated by the uncertainty surrounding businesses during this period.
Nonetheless, this is not going to last till eternity. So, we can look forward to enjoying a future without COVID-related problems for the auto industry.
In conclusion, all key players in the car industry need to come together to tackle these challenges.
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    Huon Country Cottage and Buttongrass Retreat provide accommodation locations in the Huon Valley.
    Call us from 9am to 7pm on 0427 648465 or 1800 770 224.
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