With customer waiting period for new cars stretching past 12 months, new car sales in Korea and Japan have dropped to their record low. Korea ended 2022 with 1,395,297 units, which is the Republic’s lowest since 2013. Across the East Sea, Japan sold 4,201,321 units, the Land of the Rising Sun’s lowest since 1977.
The Hyundai Motor Group for example, is working to clear more than a million backlogged orders while many popular Toyota and Honda models have a waiting period stretching past one year. Orders for the recently launched 2023 Toyota Prius and FL5 2023 Honda Civic Type R for example, are temporarily suspended.
The situation is more acute in Japan because Japanese manufacturers are prioritizing their export markets like USA over their domestic market.
Manufacturers say it’s difficult to accurately predict how much longer will the situation persist, with many saying that the shortage in semiconductor parts persisting until 2025.
Also read: Honda Civic Type R (FL5) orders temporarily suspended in Japan due to overwhelming demand
Since Covid-19 hit in 2020, chip manufacturers have struggled to restart production to catchup with the sudden surge in demand as demand for home entertainment and home office equipment surged.
Although supply shortage for smartphones, notebooks, and gaming consoles have since eased, supply of automotive electronic parts remain short because automotive parts have a much more stringent safety requirement, with a much higher tolerance for extreme temperature and vibration.
As such, automotive electronics are based on proven but older technology, with chips that are one or sometimes multiple generations behind other consumer electronics.
Chip foundries that make these automotive chips also find it difficult to ramp up production for older generation chips as investments for future capacity expansion will naturally be focused on newer generation chips.
Closer to home, many popular models from Proton, Perodua, Toyota, and Honda have a waiting period of at least 6 months, with some stretching into 13 months.
Source: Long customer waiting period, 2022 new car sales dropped to record low in Korea and Japan