Toyota Australia is calling on consumer authorities to introduce regulations that would discourage buyers of near-new cars from selling their vehicles to make quick money and slam the brakes on “scalpers” as thousands of customers remain stuck in the queue.
Record demand for new cars, combined with ongoing stock shortages and shipping delays, have stretched waiting times for popular models from three months to even two years across the auto industry. The crisis has created a disturbing trend: some customers are offering to sell their place in the queue, or are reselling their vehicle for more than the recommended retail price to buyers who don’t want to wait.
While many industry analysts say these are merely the forces of supply and demand, Toyota Australia says the practice of “flipping” or “short-cycling” a new car disadvantages customers who pay over the odds and anyone waiting patiently in the queue. Sean Hanley, the sales and marketing head of Toyota Australia, and a 30-year veteran of the car industry says:
“We’ve spent decades building trust around our brand and it’s quite disturbing to think that we have a few (customers) who are short-cycling our cars to make money. We need to protect as best we can our customers from those types of behaviors.”
He said this drawing a comparison with scalpers who horde tickets to live shows, and then sell them for higher than their box office price. Hanley said they want this situation changed, as he believes customers should be paying a fair and reasonable price based on the manufacturer’s retail price. He went on to add:
“Used cars are a different matter. But for a new car, we don’t want customers paying over the odds. We intend to investigate everything we can within the legalities of Australian Consumer and Competition Law to try to (find a solution). I urge governments and authorities to please consider this proposition and what’s happening in the market now, because we’re all about protecting consumers. Yet we’re seeing (overcharging by private resellers) going on, so we’ve got to work together to say ‘hey, this has got to stop’.”
Toyota Australia is on track for record new-car sales in 2022 – in a market that is down 4.5% year-to-date – as market research shows consumers gravitate to brands they trust in times of crisis. Hanley says “That’s why it’s so deeply important we take that leadership position (to address) any sort of price gouging, any sort of price scalping. We’ve got to stop that. Not only at Toyota, but as an industry.”
In Japan and North America, some car dealerships insist customers to sign a document agreeing to not on-sell the car for a quick profit, however such a requirement is illegal in Australia. Mr Hanley said they are acutely aware of the legalities around these sorts of activities. So they have to be very much clear anything they do is legally within Australian Consumer Law and Competition Law. He went on to add:
“But it’s something that I think we’ve got to challenge, because we have governance around what we can and can’t do to protect consumers in terms of pricing and in terms of warranties. And yet we have a situation here right now, where seemingly we’re all looking at each other (asking ourselves) what can we do?”
A 3d animation professional with over 20 years of industry experience having served in leading organizations & production facilities of Pakistan, an avid car enthusiast and petrolhead with an affection to deliver writings to help shape opinions. Formerly written for PakWheels as well as major publications including Dawn. Founder of CarSpiritPK.com