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Why the shiny new car you just bought may still be two years away

Business

Eagers Automotive has an order book at record levels that would take a minimum two years to complete, the company told shareholders on Wednesday.

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At the Brisbane company’s annual general meeting, chief executive Keith Thornton said the next couple of months for the company would be more about the ability of Australia ports to process the delivery of cars than by demand.

Thornton said demand was continuing to exceed supply but port delays were materially affecting supply.

“The current top 10 brands by volumes in the Australian market, excluding Tesla, are down 10.2 per cent year to date in 2023, evidencing these unprecedented disruptions,” he said.

However, the company was still booming. Year-to-date revenue was up 9 per cent and its forecast increase of $1 billion in revenue for 2023 was unchanged.

Supply of vehicles was also still being impacted by a shortage of components and the Ukraine invasion has made this worse.

“While supply remained constrained, consumer demand for new and used vehicles remained strong, with monthly average order-write across the period improving even further on the strong 2021 levels,” Thornton said.

“The on-going difference between demand and supply continued to build our order book. This order book is at record levels across the business, increasing in size every month since the middle of 2020 and by more than 74 per cent in 2022 on 2021 levels.

“The order book provides a minimum two-year run-off period and will help support on-going strong margins and act as a hedge against economic headwinds. The significance of our order book cannot be overstated and it is a key differentiator against other consumer discretionary companies that Eagers is sometimes compared to, but which face immediate impacts from the tightening of general economic conditions.

“For the remainder of 2023 we are encouraged by the pipeline of stock expected to be delivered by major partners as well as the general easing of supply constraints.”

 

 

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