However, with some models, delivery can be made after a year and a half
The electronic component crisis and the coronavirus pandemic continue to take a heavy toll on the automotive industry. These two factors have led to a shortage of new cars on the market, and this reflects on delivery times to the end customer. Who has no choice but to wait, and a lot…
Bulgarian companies selling new cars are also suffering because there is consumer interest, but production problems are deepening. First of all is the emerging situation with the war in Ukraine, where much of the semiconductors needed to equip every vehicle are produced. In Ukraine, there are 17 such enterprises owned by foreign companies. And they are not working because of the hostilities.
They are another problem
the suspension of production in Chinese factories
and the shutdown of Shanghai port operations caused by a new wave of the coronavirus. China is a major supplier of equipment for cars assembled in Europe, and this has caused a major upheaval in the production plans of major companies.
A new threat is also the reduction of gas supplies from Russia to Western Europe. Companies such as Mercedes-Benz and BMW have already announced that if the authorities in Germany introduce restrictions on gas consumption, they will be forced to cut production. And this will again affect the customers who are waiting for their new cars.
All this interferes with the normal trade, where a customer goes to a car dealer, orders a car, waits a certain period of time, about which he is informed, and then receives it. But the deadlines are getting bigger and bigger, like
for Bulgaria they are on average between 6 and 9 months,
but there are cars where delivery is planned for more than a year and a half.
It all depends mostly on the model. For Renault Arkana, for example, the wait is about 9 months. The same applies to the most popular model of Skoda – Octavia, which enjoys huge interest in our country. However, Dacia cars are delivered faster – within 3-4 months, while at the same time for the electric Skoda Enyaq, the wait exceeds 18 months.
There is also a possibility that the car will arrive much faster, but then the customer has to make compromises with the equipment. Here the same Arkana can be given as an example. In some markets, Renault offers the Fast Track offer, where the customer is guaranteed to receive their car within 30 days. But with restrictions: the car must be white, black or gray, the engine – only E-Tech hybrid 145, and the equipment level – RS Line.
However, few are inclined to such restrictions, and this applies to all car brands. After all, you are inclined to pay 50,000 or more BGN and it is normal to want systems and technologies in the car that are to your taste, and not basic equipment.
The problem of delayed deliveries is more serious for manufacturers, suppliers and dealers of high-end cars respectively. There, customers choose a variety of equipment and additional options, i.e. it is rare to meet two identical cars. And this further slows down the production, whose schedule is already disrupted by the various problems.
What are the customer’s options in the event of a delay?
There are two options – to continue to wait patiently or to get the deposit back. The advance amount is paid when concluding the contract for the purchase of a car and is from 5 to 10% of the price. A delivery period is recorded in the contract, after which the down payment can be requested back. However, a check among dealerships in the country shows that few customers want their money, because wherever they go for a new car, they will still have to wait a long time.
There are even striking cases where customers ordered a car more than a year ago. And now the dealer receives a notification from the manufacturer that the ordered car will not be able to be produced even after the announced deadline. Here, too, there are two options – the customer takes the deposit back or makes a new order. And accordingly, he has to wait a long time again.
The fact is that
manufacturers lose money from this delay,
as inflation increases and their costs rise. However, car importers and dealers are more damaged as they have virtually nothing to sell. From a representative office of a premium brand in Bulgaria, for example, they said that they sold “on the green” the entire quota of the most expensive and luxurious model, but the first deliveries to customers are expected only in the spring of 2023. And we are talking about orders made at the beginning of this year. And the dealerships support themselves precisely from car sales, and the down payment alone cannot cover their costs.
The delay in deliveries has also led to the virtual disappearance of customer promotions. Now there are such only for cars with minimal basic equipment, which lie in the dealers’ warehouses. However, they usually come with an engine and gearbox combination that almost no one wants.
Cars returned from leasing, which were available at the dealerships of major manufacturers, are also disappearing from the market. They sell almost like lightning, with some of them not even reaching the dealers. Currently, consumers prefer to buy a 2-3 year old car that has been maintained by the dealer and has a clear service history, rather than waiting much longer for a new one.
As a result
cars returned from leasing have become more expensive
The increase in their prices varies between 15 and 30%. There have even been curious cases where such cars are sold for more than they were traded for when they were new. And one more fact – if before the crisis a new car depreciated by 25-30% in 2-3 years, now its price falls during this period by only 5%, and in some models even by less.
The situation abroad is no different from that in Bulgaria. In Germany, for example, second-hand cars have risen in price by up to 20%, and a large part of them are exported specifically to Eastern Europe. Moreover, their number is decreasing because Germans now prefer to keep their old car instead of exchanging it for a new one.
And this situation on the market will be preserved even after solving the production and supply problems. Industry experts believe that long waits for a new car will become the norm. The crisis has already forced manufacturers to change long-standing practices. They reduce inventory and force customers to order cars that have not yet been produced.
According to Bond Brand Loyalty’s product strategist John Bardwell, this is the future: “Get used to it. That’s not going to change. That’s how Apple and Tesla became so popular. They sell fewer products, but they profit from the big margins.”
His colleague Jeff Williams, president of Absolute Results Productions, an automotive training and marketing company, agrees. He points out that manufacturers must have at least a 6-month backlog of orders to ensure future sales.
“If you don’t have a backlog today, you’re out of business tomorrow. Also, less inventory means you don’t need as many showrooms, and transportation costs are also reduced,” adds Williams.
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