It could be a long road ahead.
Having worked in the automotive industry for almost 20 years, I have known there to be various global issues that have affected vehicle production and prospective sales. Problems such as major recalls, parts on back order or natural disasters have resulted in significant component shortages affecting global production.
Now we are facing, what I believe to be, the biggest challenge the industry has faced in decades - a global shortage of microchips. Microchips are a crucial component used in many items we use daily, and the average vehicle can easily require more than 3,000 microchips to operate. Experts claim this current crisis will cost the industry $210 billion and could take until 2023 to be fully resolved.
Why the shortage?
The semiconductor industry was temporarily shut down by the Covid-19 Pandemic, just like the rest of the world. However, while car manufacturers and dealerships were still closed, there was a huge increase in demand for home entertainment systems. In addition to this, a surge in the need to work from home meant that requirements for home computing systems significantly increased. Following this peak in demand, the automotive industry got pushed down the list in terms of priority for supply of key components. In addition to this, one of the major suppliers of semiconductors (Japanese firm Renesas) suffered a devastating fire at their Naka plant.
The shortage of microchips has ground production lines to a halt. Most manufacturers are now quoting lead times of more than 6 months when ordering new vehicles, some more than 12 months.
There are batches of vehicles coming through the network, however the numbers are unfortunately very small. Manufacturers such as Hyundai and Kia have fared better and are a good option to consider if you need a vehicle sooner rather than later.
The global shortage has resulted in used car prices increasing to an all-time high, with existing car owners experiencing month on month increases on the valuation of their vehicles due to the lack of new vehicles available for new customers to buy.
Creative Vehicle Leasing can provide assistance with valuing your existing car, please get in touch if we can help.
What is available?
Vehicles available for delivery this year include (but not exclusive to) Mercedes-Benz EQA, Hyundai Tucson and Volkswagen ID3, Golf and Touareg. Customers are now faced with the potential of having to move away from the brands they have remained loyal to or even extending their current lease deals.
The situation will not be resolved in the coming weeks so please give us a call to discuss the best options for you and how we can help you during this period.
Here at Creative Vehicle Leasing we have access to a huge network of suppliers and have a great chance of finding the right vehicle for you.
Please feel free to call on 07964 137150 to discuss further.