The new car market is heading for an all-time high and Hyundai NZ is happy – and wistful.

COVD-related challenges haven’t kept the new car market from running hot – and Hyundai’s local agent wishes the supply line could keep up. 

In offering thought that the annual count of new passenger and light commercial vehicle registrations might hit 165,000 units - a new high for the NZ scene – and that some of his own products are going gangbusters, Hyundai New Zealand boss Andy Sinclair has also conceded he could do with another 2000 cars and vans to sell this year.

Sadly, that wish is unlikely to be granted by the brand he represents. Hyundai is one of many makers now being hindered by a global shortage of semiconductor chips.

 That problem relates back to the first half of last year, when the industry, when having to contain assembly due to Covid-19 and also confident the global demand for cars would slump, also cancelled component orders.

The highly-specialised semiconductor industry on-sold chips destined to cars to alternate users – mainly phone, computer and gaming console makers, whose business also lifted dramatically.

However, it’s now bad news for the car world – that recession in automotive interest didn’t happen. Rather, demand went through the roof; since June last year, NZ sales have been buoyant.

However, those factories aren’t able to keep pace because they’re short on computer chips. Modern cars might need up to 50 of those.

Hyundai NZ has customers on hold for new products; Sinclair says the only consolation – if it could be called that – is that every brand in this market is facing the same problem.

He doesn’t expect the local market to return to situation normal until at least the third quarter of 2022. 

That’s just a a gut feeling; likewise to some degree his expectation of the market hitting 165k this year.

“That’s based on supply for everyone remaining reasonably consistent and constant from now on.”

Meantime, the market is behaving quite differently than it did prior to Covid crisis.  

With a ready supply of product, distributors don’t risk having a glut of vehicles – so, there’s very little need for them and their sales networks to undertake the practices of pre-registering vehicles to achieve monthly targets. Also, of course, there’s no need to discount, either.

Although Hyundai here has generally received a consistent supply of product from the factory: “it is always a few hundred units fewer than what we’d have liked.

“Traditionally, when (delivery) ships came in, about 60 percent of vehicles went to storage and 40 percent went to dealerships. 

“The split is now 95-five: Five percent go to storage.”

Buying trends have also shifted; fleet is still important, but no longer anywhere near so dominant. At the moment, private buyers account for 42 percent of sales.

When the industry is making comparisons to determine trends, they’re skipping 2020 and instead measuring this year’s activity against the same period of 2019 on grounds that “last year was so far from normal.”

That analysis shows some strong sector results: The Santa Fe holds top dog status in the large SUV category year-to-date and the larger Palisade achieved monthly dominance in upper large.

The iLoad van has just achieved its highest-ever monthly impact; a bitter-sweet as it’s about to leave the showroom and be replaced by a new-look product, the Staria.

Hyundai continues to have a strong share in the battery-electric market – reflective, he feels, of Hyundai having the most electric vehicles priced below $80,000, the point at which Government’s rebate ceases to apply. 

It’s supply issues with the compact Kona and previous generation Tucson that have largely left him 2000 units short. The previous generation three Tucson effectively exhausted a year ago – the new generation line arriving now from the Czech Republic has a big job to do.

It’s representing in nine variants to start with, all featuring normally aspirated 2.0-litre petrol and turbo petrol and diesel 1.6. Some 1.6 petrol mild and plug-in hybrid editions will come next year.

When NZ emerged from lockdown, Tucson demand rocketed; basically, Hyundai NZ sold up in months a stockpile it had confidently thought would last until this year. The factory was unable to provision more; Sinclair accepts this has been costly - if he had extra stock it would have been sold.

“Coming out of Covid no-one anticipated the demand … we hadn’t under-ordered but, had we had a crystal ball, we would have ordered more. There was limited production, the changeover from one model to the other and the semiconductor issues … all of that had an impact.” 

Tucson has historically been Hyundai NZ’s top-selling model but all the SUV models are core, and they account of 64.5 percent of the brand’s sales here; the national industry average is 52 percent. 

“There is certainly a trend of older people going to compact SUVs and, of course, medium SUVs is very strong with a good family orientation.”