Selling cars is not a problem for most car dealers at the moment, but getting enough stock and quickly is a challenge.
Chief executive of Australian Automotive Dealers Association James Voortman said wait times for popular models have blown out to 12 months and longer.
"It's a very unprecedented situation," Mr Voortman said.
The general manager of the Toyota dealership in Phillip, Canberra, Amir Hayati, said before the pandemic the average wait time for a car was four months.
"But that definitely has extended a lot to the 12 months," he said.
The main reason for the long wait times for new vehicles is the global shortage of microchips or semiconductors.
Modern cars can have hundreds of these components, which are like tiny computers or brains that make different parts of the car work.
"It's a problem affecting every market and every brand in the world," Mr Voortman said.
Toyota announced in February that it was cutting vehicle production again by 150,000. General Motors, Ford, Kia and Opel are among the long list of other car makers to have slashed production again in response to the ongoing semiconductor chip shortage.
French manufacturer Peugeot has reverted to analog speedometers instead of digital units for some models.
"Various manufacturers over time have had to pause production completely, or at the very least pare back because they haven't had access to the raw materials and the inputs that they've needed," KPMG chief economist Sarah Hunter said.
Ms Hunter said the problem started when companies cut back on semiconductor orders at the start of the pandemic because they expected demand to weaken.
"Chip producers took this on board and shifted their production to chips that are used in electronics, IT equipment, things like that, where demand was really strong," she said.
"And so car producers really went to the back of the queue. And it's just not caught up since then."
Global car production drops
COVID-19 lockdowns, port closures and shipping delays have added to the pressures on the car industry.
European nations appear to be suffering more greatly than Asian nations, with China having recovered production levels from COVID-19 lows, according to Datium Insights.
Compared to 2019, US car production is down 41 per cent, Germany's fell 31 per cent and the United Kingdom dropped 36 per cent.
"We expect Euro brands who source the majority of their stock from Europe to experience challenges in bringing in stock to Australia across 2022," Datium Insights Head of Business Intelligence & Product Tanim Ahmed said.
Carmaker BMW has also cut production at its factories and deleted touchscreens from some of its models because of the chip shortage. The car maker also warned of further supply chain disruptions due to Russia's invasion of Ukraine and expected the chip crisis to drag on this year.
Ms Hunter said Ukraine is a major producer of neon which is a key component of microchips.
"Neon is an absolutely essential input into chip making [and] chip production. You can't substitute it for anything else," she said.
"We've obviously seen the fallout in terms of oil markets and what's happened to the oil price, and indeed to other commodity markets and commodity supplies as well.
"Russia, for example, is a major supplier of copper, but those supplies are now being disrupted in the global marketplace. It's generally a challenging time for manufacturers in all sectors. And car producers are no exception to that."
Ukraine is also a key source of wire harnesses that are used to power automotive electric systems.
"There are vehicle manufacturing capabilities in some of those markets. And as they close, that's just going to add to the the global disruption in production," Mr Voortman said.
"There are also some very critical minerals being made, particularly in the manufacture of catalytic converters, and a lot of that's based in the Ukraine. So expect this to only add to the problem."
Locally, cashed-up Australians who have been unable to travel abroad, have been incentivised by the federal government's instant asset write-off policy, or don't want to catch public transport are behind the demand for cars.
Total new car sales were 1.6 per cent higher in February compared to the previous year. Many of those sales are orders that still need to be filled. Demand for cars fell in 2020, but bounced back in 2021.
Electric vehicles (EVs), which last year accounted for around 2 per cent of all new car sales in Australia, are also experiencing delivery delays of up to 12 months.
Chief executive of the Electric Vehicle Council Behyad Jafari said the supply chain squeeze was more acutely felt because there was a smaller supply of EVs in Australia.
"People used to be able to walk into a dealership and drive out with a car. Now it's more about walking in making an order [and] waiting for the kind you want to arrive," he said.
"A lot of these companies move their sales to online as well."
Prices soar
The price of new cars has gone up as much as 25 per cent since before the pandemic, according to website pricemycar.com.au.
Used cars have gone up 50 per cent, Datium Insight's price index shows.
Melbourne car broker Keith Pulbrook, who runs the company Her Drive, said he has never seen anything like the current market conditions.
"Prices are non-negotiable now," he said.
Gone are the days when cars were a depreciating asset. Mr Pulbrook knows of people selling used cars for more than their purchase price.
"Particular brands where they bought it [the car] for $40,000 [are being sold] in the $60,000 range, which is crazy but it's definitely happening," he said.
His client, Amanda Brown, has been looking for a new car for several months.
"I usually like to buy demo models, but there are no demo models available," she said.
"It's interesting, because it's almost like [the dealerships] want you to build a car from scratch online. Whereas before you just sort of walked in, and you had a plethora of choices."
Her advice for those in need of new wheels is to be patient.
"You have to be very patient," she said.
"Luckily, I'm not desperate to have a car tomorrow."
Back in Canberra, Mr Hayati and his team are becoming deft at managing customers' expectation.
"If you think that you would need a car next year, maybe this is the best time to come in and choose the model," he said.
