Market wrap certainty is harder to source than a container load of semi conductors
Somewhere deep in my morass of useless info sits a song lyric that reads; “We don’t know what it is, and we don’t know where we’re going” – words that immediately sprang to mind when asked for my impressions of the global automotive market as 2022 dawns.
No matter who we are and where we live, certainty is harder to source than a container-load of semi-conductors and holiday plans remain a Ministerial announcement away from oblivion.
Looking first at New Car Land, ours and every major market across the world is suffering stock constraints because manufacturers can’t obtain vital components.
A few weeks back, the Federal Chamber of Automotive Industries announced that November 2021 sales for Australia were down a massive 15.3 percent on the same month of 2020. That was despite an overall 2021 improvement of 18.3 percent and expectation that sales by December 31 would break the million-unit barrier.
“However, once they’re gone that’s it,” said a long serving salesperson for a major Japanese brand. “If the importers can’t get stock from the factories, we have nothing coming through to satisfy growing demand and that puts extra pressure on used car costs.”
Dealers then attack the wholesale market, looking for quality stock. That’s good news for sellers, with yards paying more to keep cars on the concrete. Not good for buyers though, with more competition for the best cars and people less willing to squeeze retailers on price. They just want a car, any car.
Used cars and older classics still remain available in their millions though, and every international indicator says that will not change as the year unfolds. The risk is a decline in typical vehicle quality.
“A lot of the good cars have been sold already, or owners are sitting on them not wanting to sell while they think prices still have some way to go,” an insider commented.
So, what are the prospects for record-breaking values being pushed even higher as the current decade unravels?
People who now have the means to own a particular model, or perhaps had one when younger and want to relive the experience, have been prominent contributors to recent market growth.
They are now being joined by those whose prime motivation is a (FOMO) fear of missing out. We saw this initially when Holden and Ford ended local production but added to that is the push to replace conventional cars with hybrid, full electric and even hydrogen-powered models.
Rest peacefully though because that isn’t going to happen tomorrow or even in 10 years’ time. Politicians have enough trouble recanting their resistance to electric vehicles and none of them (we hope) is dumb enough to concurrently antagonise the millions of voters who love their ULP and diesel guzzlers.
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Auction rooms will keep clamoring for ‘headline’ stock and use those cars to entice buyers for lesser examples.
However, there are growing – and well-founded – suspicions in the market that the ‘hammer price’ achieved by some record-setting lots doesn’t reflect an actual sale and those same vehicles are destined to reappear in a month or two’s time.
‘Survivor’ is an overused descriptor and often applied to anything hoovered out of a barn or backyard shed. These vehicles, complete with rust, dust and bird shit, are then dumped outside auction sites with big signs on the seat reading ‘Do Not Wash.’
Online auction sales, locally and worldwide, will continue to entertain and bewilder. However, some purists also crave the theatrics of the auction room and being able to spot just who is bidding on what.
As one former auction participant said, “In a traditional auction room you can see who is bidding: watching the ‘spotters’ relaying bids to the auctioneer. With an online sale, it is all anonymous, with numbers on your screen ticking over and you don’t know where the interest is coming from.”
Shannons Auctions & External Relations Manager, Christophe Boribon, disagrees to an extent, confirming when we called that Shannons’ timed online auction model has been well received by vendors and buyers alike and will continue throughout 2022.
What will the future hold for all the mothballed late series models?
“Our showrooms are open throughout the year so people are able to inspect cars that will be going up for sale,” Boribon confirmed. “However, we won’t go back, in the near future at least, to traditional-style auctions.
“We are seeing two to three times the participation rate that we had with conventional auctions. We are taking hundreds of bids collectively on our lots and selling cars to all parts of Australia. Some have also gone to clients overseas.”
Boribon sees no disadvantages stemming from the Covid-enforced changes and says that the system that triggers an extension of time where a bid made during the final seconds before a lot is due to close is fair to everyone.
How you fund your purchase in fiscally confusing times is critical and obtaining professional guidance very worthwhile. The same and even greater levels of caution apply when considering the investment potential of a motor vehicle, or group of them.
While rare cars sitting in sheds during the 1980s have brought big benefits, the future is uncertain and outcomes for those with a late-series cars tucked away could be very different.
Cliff Chambers
December 2021
From Unique Cars #461, Jan 2022