5 minute read
Semiconductor shortage
CUSTOMERS GET SNIFFY OVER NEW CAR DELAYS AS DEALERS BEAR BRUNT OF CHIP SHORTAGE
The semiconductor crisis is hitting different manufacturers in different ways, James Baggott discovers, but it’s all having a serious effect.
Some car manufacturers are cancelling new car orders and asking customers to reorder different models as the semiconductor chip shortage worsens.
Car Dealer has been contacted by several disgruntled customers – one of whom was told their new Land Rover would need to be reordered and they would now have to wait 18 months instead of three for their new car.
Another, a BMW buyer, said he’d been told that his new 1 Series had been delayed for the third time and there was no estimate at all as to when it would be built.
The internet is awash with complaints from angry customers as the chip shortage affects some of the biggest car makers, including Ford, VW Group, Mercedes and BMW.
Consumer titles such as What Car? and Autocar are also fielding angry complaints from people who are waiting for new cars.
Some manufacturers have been forced to quietly remove models from their lineups, drastically alter specifications and even supply some cars with a single key as semiconductors are sparingly used.
Dealer groups including Lookers, Vertu, Marshall and Cambria have all warned of new car production issues potentially impacting on their businesses in recent updates – and most showrooms are having to fend off angry customers affected by delays.
Peter Vardy told Car Dealer that some of the decisions being made by manufacturers were increasingly tricky to communicate to customers.
‘It’s a difficult position, and clearly we need to be careful about customer communication throughout this,’ he said.
‘I can see that the brands that just focus on producing the cars that make them the most money at this time might live to regret that.
‘Customers don’t forget how you make them feel, and there are plenty of folks unsettled post-pandemic and if we aren’t more careful we will have long-lasting guest dissatisfaction.’
Sytner chief executive Darren Edwards told Car Dealer that his group’s brands were being affected in different ways.
‘The majority of our manufacturer partners are impacted to a greater or lesser degree,’ he said.
‘Some models have significantly extended lead times and some have had standard features and options amended to enable them to still be built.
‘Some manufacturers have even reduced the amount of keys provided as standard.
‘Managing customer expectations under these unique circumstances is a skill that our teams have had to become very proficient at, and I am glad to say that because of their magnificent efforts it has not affected order take.’
Darren Edwards
The semiconductor shortage, though, has had a serious impact on the car industry and is hampering its return to growth after Covid-19.
There are thousands of these chips in the average car that is produced and the shortage is predicted to last well into next year.
Marshall Motor Group boss Daksh Gupta told the Car Dealer Podcast that the manufacturers he represents were being affected differently.
‘Some are telling us they’re going to be down 50 per cent in terms of what stock is available, some are saying there’s not too much of an impact, and others are saying it’s about 25 per cent.
‘I think everyone knows there are supply challenges that we’re all facing at the moment.
‘It’s absolutely fascinating. I personally quite like challenges like this because it’s quite stimulating to navigate. I’m sure not everyone likes doing that, though.’
Haymarket Automotive editorial director Jim Holder – who oversees Autocar and What Car? – has been at the sharp end of customer complaints as his readers voice their concerns about the delays.
‘There is a degree of acceptance among the car buyers as they understand these are unprecedented problems and the fact they apply to almost all car makers – but it is clear that, for some, patience is wearing thin,’ he said.
‘Some believe they are being played by dealers and manufacturers eager to hold on to their deposits as they then push back time and again on when the order will be ready.’
Holder said it was clear that some dealers were better than others at managing customer expectations.
‘Just this week we have learnt of one customer who has bought a high-end SUV who has been told he will have to wait nine to 12 months for the car, but he is willing to do so because of the level of communication and understanding from the retailer, who he trusts to be on his side.’
But Holder added that it was evident that some dealers were simply not returning calls because, he suspects, they have sold all the cars they can get their hands on.
He said: ‘It’s critical OEMs and retailers remember that in most cases these are not orders lost, but orders delayed.
‘If retailers and OEMs want the customer to return to them, or stick with them, when the supply opens up again, then the impressions they make now are critical to earning any loyalty.’
Most analysts believe that while the chip shortage could ease towards the end of this year, the delays to the production of new cars could last until the end of 2022.
