Global shortage of new cars leaves car yards nearly empty and forces used car prices up

Neil Sutton’s Subaru dealership has only one car left.

He said, normally, he would have eight to 12 to cars on display.

“At the moment, we have one, so supply is very tight,” he said.

“The factory in Japan closed down for a month, so it’s been a chase, a catch-up, ever since.”

Mr Sutton said he still had plenty of people interested in buying new cars — they just had to wait a little longer.

“Customers come in, and they need to order vehicles, and there’d be a two-to-three-month delay,” he said.

Demand up, supply down

Neil Sutton is finding it hard to get new cars to fill his car yard.(ABC Alice Springs: Oliver Gordon)

What’s happening at this car dealership in Alice Springs reflects a global economic trend.

There are fewer new imported cars available due to factory disruptions around the world, leading to an increase in demand for used cars.

And with a rise in demand, comes a rise in prices.

CommSec data shows used car prices are up 30 per cent from this time last year, after falling in the early stages of the pandemic because nobody wanted to buy a car they could not test drive.

Mr Sutton is awaiting his next shipment of new cars, which is due in a few weeks.

Half of the six cars on that truck are already sold, and he said he was confident he would be able to sell the others.

“People are getting back on with their life.

And he said there were other market conditions favourable to his business right now.

“Interest rates are very low for new vehicles, so I think they’re taking advantage of that to get into a new vehicle.”

Used car prices up

Alan Thorp, who operates the second-hand car business Stuart Highway Autos, said he had seen the price increase affect his business.

He buys second-hand cars wholesale, does them up, then sells them on.

He said the cost of the used cars he bought had gone up around 50 per cent.

Mr Thorp said he was doing his best not to pass on that wholesale price rise to his customers, but he said it was not easy.

His advice for those in the car market is interesting, especially when you consider the business he is in.

“You might be wiser to get a new one than a second-hand one because the price difference won’t be very much, the way it’s going,” he said.

Man  with grey hair looking to the side of camera with a car workshop in the background
Alan Thorp from Stuart Highway Autos is seeing the price of wholesale used cars rise as a result of a shortage of new cars.(ABC Alice Springs: Xavier Martin)

Definite supply issues

Dealers around the country are reporting similar issues.

Belinda Stiles, dealer principal with Rosenthal’s Automotive in Berri in South Australia’s Riverland, is struggling with an undersupply of new vehicles.

“There is definitely a supply issue of vehicles.

“COVID-19 has been felt with our car manufacturers,” she said.

She said she was noticing customers were more willing to make choices rapidly.

“The customers realise it is harder to get a vehicle, so they’re more inclined to make a decision, rather than going home and thinking about it.” Ms Stiles said.

three four wheel drive vehicles on a car yard lot with the sign for the business in the bcakground
This owner of this car yard in Alice Springs has seen prices of used cars go up.

Seller’s market

Amber Alderson recently sold a car and was surprised at the number of people interested.

“I put it on a Riverland buy-swap-and-sell site and had 11 messages within an hour,” she said.

When Ms Alderson went to buy a new car, she was told she would have to wait for the colour she wanted.

“They did have stock of a yellow-gold colour, but I just wanted something simple like white,” she said.

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Biggest spike in used-vehicle prices in 51 years nudges U.S. inflation higher in September

Consumer prices rose sharply after the economy reopened, but the coronavirus pandemic has kept a lid on inflation more broadly.

Christian Petersen/Getty Images

The numbers: Consumer inflation rose in September at the slowest pace in four months, suggesting the shock from the coronavirus pandemic on the price of goods and services is starting to fade. Most of the increase last month was tied to the biggest jump in the cost of used cars and trucks in 51 years.

The consumer price index rose 0.2% last month, the Labor Department said Tuesday, matching the MarketWatch forecast. It was the smallest increase since since May.

Consumer inflation sank early in the coronavirus pandemic, then snapped back after the economy reopened, but it might be settling into a more stable pattern.

The cost of living has risen just 1.4% in the past year, up a tick from the prior month. The broad rate of inflation is still quite low with the coronavirus continuing to depress economies around the world.

By contrast, inflation was running at a much higher 2.5% rate at the start of 2020.

What happened: The cost of used cars and trucks jumped 6.7% in September, posting the biggest increase since 1969.

Used-vehicles prices surged over the summer, probably because so few people were using public transportation while the coronavirus was spreading.

The cost of natural gas also shot up 4.2%, pushing overall energy prices higher.

Yet the rise in the cost of most other goods and services were muted.

Gasoline prices, for example, edged up just 0.1%, the smallest increase since the economy reopened in May. Rents also rose just 0.1% and the cost of medical care was unchanged.

Grocery prices, meanwhile, declined for the third straight month after a big runup in the first several months of the pandemic.

The cost of airline tickets, clothing, home furnishings and auto insurance also fell.

Another closely watched measure of inflation that strips out food and energy, known as the core rate, also rose 0.2% last month. The yearly increase in core CPI was unchanged at 1.7%.

Big picture: Inflation rebounded more rapidly than expected during the summer after slumping when the pandemic struck in March. Yet prices are unlikely to rise much faster until the economy gets stronger and demand picks up. Many companies have had to cut prices to entice customers to spend in a time of such high economic uncertainty.

What they are saying? “Inflation plunged, then partially rebounded, with the collapse of demand in the first half of this year and the rapid, partial rebound in the third quarter,” wrote chief economist Chris Low of FHN Financial in a note to clients. “From here … the ongoing elevated unemployment rate, reflecting elevated excess productive capacity globally, will keep inflation down in the next few years.”

Market reaction: The Dow Jones industrial average DJIA and S&P 500 SPX fell slightly in Tuesday trades.

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Rains a good start for cattlemen as prices are high


Cattlemen are looking for follow-up rain – a likelihood in this year of La Niña – after good recent falls north and south of Alice Springs.

North of town they reached 70mm, Gemtree 84mm, and also around 70mm south of The Alice, says Cattlemen’s Association CEO Ashley Manicaros: “It’s a good start.”

Prices for cattle remain high, driven up by the scarcity created by drought that in some areas resulted in less than five millimetres of rain in 18 months.

Re-stocking in Queensland is also keeping prices high.

Cows pregnancy tested in calf are bringing more that $2100 per head in SA and Victoria, increases of some $250 a head, and heifer by $42, says Mr Manicaros.

“One of the good things of the arid zone region is that the pasture bounces back very quickly.

“Those who de-stocked would now want to let their land rejuvinate on the back of these rains, and then look at re-stocking to the level they had two or three years ago.

“Feed bouncing back now will give them a chance to sell stock they had maintained, recovering some of the overheads they had during the dry spell, including buying hay.”

It will be a few months yet before the cattlemen, provided they get follow-up rains, will move into the black.

PHOTO from the Bureau of Metereology – a cloud-free Centre again, waiting for La Niña.

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Oil prices steady amid return of supply, while COVID-19 lockdowns tighten

October 13, 2020

By Sonali Paul

MELBOURNE (Reuters) – Oil prices were steady in early trade on Tuesday, sitting on losses of nearly 3% from the previous session after supplies began to resume in Norway and the U.S. Gulf of Mexico and Libya resumed production at its largest oilfield.

The return of supply comes as resurgent COVID-19 infections in the U.S. Midwest and Europe raise worries about fuel demand growth, posing a challenge for the Organization of Petroleum Exporting Countries and its allies, together called OPEC+.

OPEC+ has curbed supply to help shore up oil prices amid coronavirus pandemic, with cuts of 7.7 million barrels per day due to hold through December. The producers’ market monitoring panel is due to meet next Monday.

“It won’t be a huge surprise if finally the alliance decides to address the worsening situation and amend its action,” Rystad Energy’s head of oil markets, Bjornar Tonhaugen, said in a note.

U.S. West Texas Intermediate (WTI) crude <CLc1> futures inched up 1 cent to $39.44 a barrel at 0117 GMT, while Brent crude <LCOc1> futures rose 2 cents to $41.74 a barrel.

With workers returning to U.S. Gulf of Mexico platforms after Hurricane Delta and Norwegian workers returning to rigs after ending a strike, all eyes were on Libya, a member of the Organization of the Petroleum Exporting Countries (OPEC), which on Sunday lifted force majeure at the Sharara oilfield.

The country’s total output on Monday was at 355,000 bpd and will double if the Sharara field gets back to pumping at the 300,000 bpd it was producing before the Libyan National Army blockaded energy exports in January.

“That would effectively add 0.3% of global oil supply in a very short time frame,” Commonwealth Bank commodities analyst Vivek Dhar said in a note.

Stoking worries about fuel demand, curbs were being tightened in Britain and the Czech Republic to battle rising cases of COVID-19, while French Prime Minister Jean Castex said he could not rule out local lockdowns.

(Reporting by Sonali Paul; editing by Richard Pullin)

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Dialling down – Japan’s cosy telecoms firms are being told to lower prices | Business

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Oil prices rise as Hurricane Delta approaches U.S. Gulf of Mexico

FILE PHOTO: the sun sets behind a crude oil pump jack on a drill pad in the Permian Basin in Loving County, Texas, U.S. November 24, 2019. Picture taken November 24, 2019.REUTERS/Angus Mordant

October 8, 2020

By Sonali Paul

MELBOURNE (Reuters) – Oil prices rose on Thursday as oil workers evacuated rigs in the U.S. Gulf of Mexico ahead of Hurricane Delta, though fuel demand concerns persisted on fading chances for an economic stimulus deal in the United States, the world’s biggest oil consumer.

U.S. West Texas Intermediate (WTI) crude futures rose 13 cents, or 0.3%, to $40.08 a barrel at 0215 GMT, after falling 1.8% on Wednesday.

Brent crude futures rose 20 cents, or 0.5%, to $42.19 a barrel, after falling 1.6% on Wednesday.

With Hurricane Delta forecast to intensify into a Category 3 storm with winds of up to 120 miles per hour (193 km per hour), oil producers have evacuated 183 offshore facilities and halted nearly 1.5 million barrels per day (bpd) of oil output.

The Gulf of Mexico produced 1.65 million bpd in July, according to the U.S. government. The region, which accounts for 17% of U.S. crude output, has been hit by several storms over the past few months, each of which only briefly dented oil output.

Hopes for a further pick-up in U.S. fuel demand faded as White House officials reiterated on Wednesday that “stimulus negotiations are off” a day after President Donald Trump halted talks on a broad relief package.

The possibility that there will be no upcoming economic support measures comes as government data on Wednesday showed demand for oil at U.S. refineries is 13.2% lower than a year earlier, underscoring the plunge in fuel demand from the disruptions caused by the coronavirus pandemic. [EIA/S]

“A piecemeal approach to U.S. fiscal stimulus is unlikely to alter a deteriorating demand outlook for oil,” ANZ commodities analyst Vivek Dhar said in a note.

The Energy Information Administration data on Wednesday did show U.S. gasoline stocks fell more than expected last week to their lowest since November, and distillate stockpiles also declined. However, crude oil supplies rose by 501,000 barrels, as production and imports climbed.

“As global oil demand falters, there is increasing pressure on global oil supply to adjust lower to keep prices supported,” Dhar said, forecasting Brent would average $41 a barrel in the current quarter.

(Reporting by Sonali Paul; Editing by Christian Schmollinger)

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Oil prices slide as Trump cancels aid talks, U.S. crude stocks expand

FILE PHOTO: An oil pumpjack is seen at Lake Maracaibo in Lagunillas, Venezuela May 24, 2018. REUTERS/Isaac Urrutia

October 7, 2020

By Jessica Jaganathan

SINGAPORE (Reuters) – Oil prices slipped on Wednesday after U.S. President Donald Trump dashed hopes for a fourth stimulus package to boost the coronavirus-hit economy and on a larger-than-expected build-up in U.S. crude stocks.

U.S. West Texas Intermediate (WTI) crude <CLc1> oil futures fell 87 cents, or 2.1%, to $39.80 a barrel by 0104 GMT while Brent crude <LCOc1> futures fell by 74 cents, or 1.7%, to $41.91 a barrel.

President Trump, still being treated for COVID-19, ended talks on Tuesday with Democrats on an economic aid package for his pandemic-hit country with the U.S. presidential election only weeks away.

Price were also pressured by data from the American Petroleum Institute showing U.S. crude oil stocks rose by 951,000 barrels last week – more than expected. <API/S>

“(This was) not exactly what the recovery doctor ordered as the oil market was already tanking from a two-week high after President Trump quashed hope for a pre-election stimulus deal,” said Stephen Innes, chief market strategist, at online brokerage AxiCorp.

But losses were limited by restrictions on the supply side.

Energy companies were busy securing offshore production platforms and evacuating workers on Tuesday, some for the sixth time this year, as Hurricane Delta took aim at U.S. oil production in the Gulf of Mexico, which accounts for 17% of total U.S. crude oil output.

In Norway, meanwhile, the Lederne labour union said on Tuesday it will expand its ongoing oil strike from Oct. 10 unless a wage deal can be reached in the meantime. Six offshore oil and gas fields shut down on Monday as Lederne ramped up its strike, cutting the country’s output capacity by 8%.

(Reporting by Jessica Jaganathan; Editing by Kenneth Maxwell)

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Toronto home prices hit new high in September as sales surge 42%

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Toronto’s housing market continued to break records in September with sales up 42.3 per cent from the year before.

The 11,083 homes sold was a record for the month, the Toronto Regional Real Estate Board said Tuesday. Sales of single family homes continued to drive the gains. Sales growth was also higher in the areas of the GTA that surround the City of Toronto.

The lion’s share of the homes sold (7,528) were in the 905 areas, surrounding the City of Toronto.

Sales of single family homes also continued to drive the gains. A total of 5,559 detached homes were sold, a 54.7 per cent increase from the year before.

Condo sales, on the other hand, were up 14.6 per cent.

The average selling price also rose to a record $960,772, up 14 per cent from the year before. Again price gains were driven by the low-rise segment of the market. Condos, which have seen a surge in supply, saw slower price growth.

“On a GTA-wide basis, market conditions tightened in September relative to last year, with sales increasing at a faster pace than new listings. With competition between buyers increasing noticeably, double-digit year-over-year price growth was commonplace throughout the region in September, resulting in the overall average selling price reaching a new record,” said Jason Mercer, TRREB’s Chief Market Analyst.

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