If you’ve been waiting a long time for your car or replacements parts you’re not alone. Covid-19 has halted many international shipments and dramatically increased the cost of producing automobiles. This article will outline the reasons for new car and spare part delays, as well as how you can navigate the current landscape in 2022.
- Omicron’s affect on new car delays
There are multiple reasons for new car delays in our current climate. Firstly, the Covid-19 Omicron variant may be a less fatal virus compared to its counterparts (Delta, etc.), but it is more infectious. This has a significant impact on global economies, as manufacturing car plants have to close their doors as staff become sick and must self-isolate. Factory production delays then occur due to the decrease in working staff and in some cases factories have had to shut down completely while their staff are away.
Not only is the direct impact on a manufacturing facility being felt, but most businesses rely on other suppliers for car parts, specialist tools, equipment and more. This knock-on effect is one of the major contributors to the delays for new cars as each business in the supply chain gets caught up on product/service shortages. One example of shortages within the industry is computer chips which we’ll discuss in the next section.
With new car shortages across the globe, consumers simply have to wait. This build-up creates a backlog of those waiting to purchase, therefore customers are having to wait longer to receive their new car. Some customers have reportedly had delays of up to four months for a new Hyundai Tucson according to whichcar.com.au (https://www.whichcar.com.au/news/australia-new-car-delays-top-20-models-affected). The typical wait time is usually around one month.
- Computer chips are being sold to more profitable Industries
Computer chips (also known as semiconductors) are essential in many of today’s modern technologies. They’re used in our phones, white goods, consumer electronics and vehicles. With the demand for chips increasing, so does the wait time. Car manufacturers must get in line with so many other businesses across different industries in order to produce and sell their finished products.
With the technology sector continuing to explode, there doesn’t appear to be a quick fix to meet the demand for computer chips from the technology sector. As consumer demand increases for computer chips, it may be a while until supply catches up to demand.
- Shipping remains expensive
Shipping cars is expensive, especially at an international level. Consumer Affairs (https://www.consumeraffairs.com/automotive) states that international car shipping prices can range from $1,000 to $5,000 USD per vehicle. This is all dependent on the distance of the ports, the type of vehicle being shipped, taxes, and more. But the cost of shipping directly affects the price that customers need to pay, therefore it is an important consideration when it comes to the reason behind new car price increases. Amongst shipping price increases there is also pent up demand for new cars as consumers look to upgrade. With the lack of new cars sitting in stock, and those being sold taking longer than usual to replenish it simply means supply is not keeping up with demand. Dealerships don’t have to drop prices or offer promotions as their cars are flying out the door. But what this means for the used car market is that prices have actually increased despite being 2nd hand. Some trucking companies are waiting up to 6 months for new prime movers or trailers.
How to navigate new delays and issues
The changes that we face in 2022 in regards to new vehicles delays is difficult to navigate. Unfortunately, people wanting to buy new vehicles don’t have many options besides lining up and putting a deposit down now. It’s believed that with the ease of Omicron, more workers can get back into manufacturing plants and help increase the supply of parts manufacturing and ultimately the new vehicles. So, if you’re looking to purchase a new car this year – the best time is now!