Pre 2020 the typical waiting time for a factory ordered new car would have been one to three months. Since the beginning of the pandemic, the habit of replacing your car has become more complicated. Initially the pandemic caused delays in production as factories were closed. Then the global shortage of semi-conductors created major disruptions and caused some cars to be de-listed from some countries and options such as a sunroof to become unavailable. And most recently the war in the Ukraine has caused issues as they manufactured wiring looms to major car brands. These issues impacted the availability and prices of cars across the world. But what does that mean for car exporting?
Used car prices have increased globally
Used car prices are thought to have risen by 30-40% in the UK in 2021. This level of increase is unprecedented and due to the pent-up demand over the pandemic and the lack of availability of ex-demonstrators caused by factories closing during lockdowns. Whilst the UK lead this change, these increases have since spread across the world as the residual stock of cars ran down and markets adjusted to the new climate. The good news is that the value of your current car will also have risen in line with these increases, giving your more money for your trade in.
New car prices have increased
Unfortunately, the prices of new cars have also increased. Raw material shortages are forcing manufacturers to pay higher prices for their components which make up the electrics on the cars. In addition to that, car buyers who ordered their cars 12-18 months ago are also now receiving their cars and realising the opportunity to make a quick profit. It’s not uncommon for a private individual to receive their car and advertise it within the week for a premium. And of course, car buyers who are fed up with waiting are now prepared to pay a premium for a car rather than wait indefinitely for a new car to reach them.
How the supply of new cars has changed.
Manufacturers have also had to move away from making the car to a customer’s specific requirements. Previously a car would be built to order, but the shortages in micro processors found manufacturers such as Mercedes in a predicament because they were producing cars with some options missing. Rather than wait for the missing components and create a huge backlog of orders, they have started to manufacture cars with the options they can supply. This has changed the way new cars are being bought. The customer is forced to choose from what is available or wait indefinitely for their specific options.
New car production stops for major car models.
Lead times have increased to such an extent that in some cases they are an unknown. It has been reported that in early March Porsche has stopped production of the 718 and 911. A Porsche spokesperson confirmed that their Leipzig factory shut down on 2nd March. Mercedes has also temporarily halted production on the S350. Audi has removed the option for a sunroof on the Q7 altogether. We are not expecting these pauses in manufacture to ease in the short to medium term and are finding the best approach is to help our clients work with what is available.
Is there still a saving for car exports?
Because the car prices have risen globally, the saving is still there particularly if you are buying VAT free. However, the priority has really swung towards availability. Car exporting has become more about helping clients buy their ideal car with the minimum waiting time. Make no mistake, placing an order for a new car with your local dealer is as easy as before. Deposits are being taken, but we are frequently seeing production dates are not adhered to, continually delayed or even not committed to as they were pre-2020.
How does this impact UK car exports?
The global shortage of cars is ongoing, but as the UK is a priority country for the car manufacturers, it receives a significantly larger allocation of new cars than other countries. This means we are frequently able to source cars for clients who would have had to wait from between one to two years for their car to be supplied in their own country.
Should I buy a new car or should I wait?
We encourage you to check the lead times for a new car locally versus importing the same car. You are likely to find that importing will offer you a greater choice of cars available at shorter lead times versus buying locally. And given that there is no foreseeable end to the current supply issues, our advice is to choose your car from what is available, whether you are buying new or used. We are perfectly placed to help you find your ideal car as we have networks across all manufacturers to source new and used cars. So let us do the leg work and take the stress of buying your next car. Get in touch today to find out what is available in the UK today.
