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September 8, 2022 by Anne Kelley

Kia Supply and Demand

2023 Sportage HEV

Prices for both new and used vehicles hit record highs this summer. Over the last year, used-car prices have increased an average of 29%, according to a report from the U.S. Department of Labor. As gas prices spiked, interest in electric vehicles, like the new Kia EV6, has been especially high. Hybrids are also increasing in popularity, and Kia can’t seem to keep them in stock for long. Customers are looking to trade in their gas guzzling cars for something that won’t break the bank at the pump. Fortunately, Kia offers a wide variety of electric and hybrid models, even if they are quickly selling these days.

We’ll explore more of how Kia supply and customer demand can relate to the price for a vehicle, but first, take a few minutes to look at the current offers that Lawrence Kia has available for your next car. We still have some bargains!

 

 

 

Supply Shortages for Kia

The word “supply” refers to the number of vehicles that are available for consumers to purchase. Supply can be affected by factory production, shipping challenges, available parts, and the number of people hoping to purchase a Kia vehicle. Lately, Kia supply has been on the low end. Fewer cars have been coming off the assembly line, and there aren’t as many to choose from at the dealership.

Factory shutdowns because of the covid virus have slowed production, and a shortage of parts like semiconductor chips have left many Kia vehicles unfinished. Without semiconductor chips, some of the safety features and driving modes would be unavailable. Vehicles without those chips were left partially completed, just waiting for those final parts.  Shipping has gotten more expensive and has slowed because of worker availability. All of these factors can result in fewer Kia vehicles being available for sale.

Production isn’t Meeting Customer Demand

Despite the shortages, customers haven’t stopped wanting to buy Kia vehicles. Both new and used Kias are in high demand. “Demand” in the economic sense simply means the number of customers that are hoping to purchase a product. As demand increases, so do prices, since customers are willing to pay more for a product that can be hard to find. Even used cars are selling for more than they have in previous years, since many Kia owners are holding on to their older cars in light of the shortages. If you’re thinking about purchasing a new car, this may be the ideal time to get a great price on your older vehicle.

Kia vehicles don’t stay on the lot very long these days. When a new or used car becomes available for purchase, it’s often a matter of days, or even hours, before someone jumps in to take it home. Customers need to plan in advance to make sure they get their dream Kia and be ready to make a purchase as soon as it hits the lot. Otherwise, there’s a good chance that someone else will get there first!

Supply and demand are linked together and affect each other in a number of ways. The low supply also means that it’s harder for dealerships to maintain the cost of running their business and paying their employees. The higher vehicle prices don’t bring in as much extra revenue as you might expect. Instead of a steady stream of sales, there’s a lot of waiting for the next vehicle to arrive, and dealerships need to bring new flexibility to their daily operations.

Will Kia Prices Fall Again?

Prices probably won’t rise forever. After a certain amount of inflation, the cost for goods usually reaches what is called “equilibrium price.” This means that the supply and demand for Kias is approximately equally matched, and both buyers and sellers are satisfied with the cost of a vehicle. Customers can expect to have a selection of Kias to choose from, and dealerships and factories will be making ends meet. Kia employees can expect to have steady work again.

We aren’t quite on the other side of the pandemic yet, but hopefully conditions will continue to improve. In the meantime, keep watching for any bargains that might come through, and the latest 2023 Kia models to hit the market.

Posted in: 2022 Kia Models, 2023 Kia Models
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