Motor dealers in Eden are beginning to feel the effects of a worldwide shortage of new cars — with customers looking at longer lead times and higher prices.
The new car shortage has developed across the world due to a over-demand in semi-conductor chips which are electronic devices helping power almost every aspect of a vehicle.
During the COVID pandemic, manufacturers struggled to keep up with the demand for the chips — which also make up electronic games such as PlayStations and Xbox consoles which consumers rushed to order as they stayed at home.
The shortage of the chips, coupled with the reduced workforce as car factories temporarily shut down or furloughed workers during the outbreak, has led to reports that the global auto industry will make somewhere between 1.5 million and five million fewer vehicles this year than originally expected.
International sources state that Volkswagen alone is down 100,000 vehicles for 2021, with the situation expected to worsen in the second quarter, and it doesn’t expect to be able to make up the difference this year.
In April, when announcing quarterly results, Ford projected it would produce 1.1 million fewer vehicles than planned this year.
It was reported that in the UK that Land Rover was set to temporarily stop producing some Jaguar vehicles at its Castle Bromwich plant, and LandRover and Range Rover 4x4s at its Halewood factory.
Earlier this month, the UK’s Society for Motor Manufacturers and Traders said the shortage was hampering the industry’s recovery from the coronavirus crisis, with UK car production in May more than 50 per cent lower than pre-pandemic levels in 2019.
The shortage is one that motor traders across Eden have confirmed is beginning to filter into the district and affect customers at a local level.
This includes customers looking for a new vehicle facing longer lead times to get their new wheels, while the decline in trade-in vehicles means there is a shortage — and in turn price increase — in used vehicles.
Appleby garage owner Sammy Lees said the shortage is beginning to have an impact across the used car market but at present they have had no issues with new stock.
The garage has recently ordered a new vehicle from Volkswagen and has been given a 14-week lead time, which is standard.
“We are finding it difficult to find good used cars though,” Sammy said.
“There’s just a general shortage but then if you are looking on Autotrader, there’s still 30,000 cars for sale. It’s difficult but that’s because we are fussy what we buy — I could fill my yard but I don’t want those vehicles — we hand pick vehicles and that’s getting harder at the moment.”
However, Stephen Walton, director at Jim Walton Penrith, said that while the prices of used cars has been driven up, the value of cars people are trading in has matched the increases, therefore levelling out for customers.
He said the shortage of new cars is in part due to factory closures during COVID-19 but he felt this had been on the cards for a number of years with fewer sales of new vehicles creating less demand.
Danny Crehan, a director of Intercars which has bases in Penrith and Carlisle, said the problem began to emerge for them last year.
He said they have remained busy since the first UK lockdown, with people having spare cash having not gone on holiday, thus producing lots of car sales. As they tried to replace this stock it became apparent there was a growing shortage of used vehicles in the market.
“We normally have 60 to 70 cars between the two sites and are down to about 50 so that’s down 10-15 per cent on our stock. I think it will get worse, I can’t see it changing. I know one main manufacturer is not making any vans because they are saving the chips for the cars.
Factories were shut with COVID last year as well so it will take a while for it to catch up,” he said.
With the shortage creating a supply and demand see-saw, Danny said that while the price of used cars is currently up this is coming back to the customer with Intercars offering good prices on trade-ins and purchasing used cars direct from the public.
As a customer looking for a new vehicle Pat Jones, of Church Brough, said she had faced a fight to find the new vehicle she wanted with a reasonable delivery lead time.
Her son had ended up ringing dealerships across the country to locate a garage in Warrington which was able to source a brand new Kia Xceed to be delivered in less than a month.
Christina said: “It depends on the car and specification. The other model I wanted was 12 weeks so I changed to this, I had to compromise.”
The shortage is one that is crossing the automotive industry, with John Mullen, owner of Eden Commercials at Appleby, confirming it is impacting on the van sales market.
John said vehicles are out there to buy but are getting increasingly hard to source and prices are going up as a response to this. However, he added that rising prices is an issue in many industries across the country — giving examples such as building materials and shipping.
So far, the Cross Croft industrial estate-based business has managed to retain stock levels and John added that he hopes the market will return to some level of normality by next year.
