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Automotive industry outlook 2021 | Richard Aucock

In this article, motoring expert Richard Aucock discusses the current challenges in the motoring industry, and what this means for car manufacturing as well as Motability Scheme customers. Read more below. 

As the worst of the Coronavirus pandemic eases in the UK, the country has started to get back to normal. Lockdown restrictions have been gradually lifting for several months now, with car showrooms reopening in April after an extended closure period. Retailers report customers are enthusiastically returning to view and test cars in a Covid-safe way, with plenty of measures in place to protect visitors.

New car registrations are already responding, with April’s figures showing a staggering 30-fold increase on 12 months ago. It’s clear there has been a lot of pent-up demand, and this is starting to show through as orders are placed and new cars delivered.

New challenges

However, the car industry now faces a fresh new challenge: a global shortage of semiconductors, or ‘chips’. This is a problem affecting nearly every worldwide manufacturer building technology-rich products, from cars to computers. And availability of new cars risks being restricted in the coming months as a result.

Modern cars contain a huge number of chips. A shortage of just one specific semiconductor can impact production. The situation has been worsened by the Covid crisis leading to extended factory shutdowns in 2020, which saw supplies of chips intended for carmakers diverted elsewhere. The industry is now struggling to eliminate bottlenecks and return supplies to normal.

Car industry bosses are already warning that the impact on new car production will be more severe between April and June than it was in the first quarter of the year – and some are advising challenges could continue right through 2021 and into 2022.

It is not just Motability Scheme customers that may be affected. All new car buyers will potentially face problems, because it is an issue affecting the entire car industry. Car factories are being temporarily closed across the globe, which is resulting in hundreds of thousands fewer motors currently rolling off the production lines.

How the chip shortage may affect you

The best way to get seamlessly into a new Motability Scheme car without delay is to work closely with your chosen dealer. They will be able to advise on what’s available, and when – if you can be flexible in your choice of new car, including model grades and even colour, you’ll stand a better chance of avoiding any setbacks.

To manage the shortage and ensure their businesses remain in good health, some car makers may focus on higher-grade, more profitable models in their line-ups. This could result in shortages of more basic cars which again may result in the need to be flexible with your new car choice. Cars fitted with specific high-tech features or options may also temporarily become in short supply.

Click here to watch our video with Motability Scheme specialist, Jonathan. Jonathan gives advice on how to minimise delays when choosing a car, and explains how dealers are getting customers’ cars ready for COVID-safe handovers.   

Even if a delivery date is uncertain, my advice is to still go ahead and place your order for your next Motability Scheme car. Many car manufacturers say orders that have already been placed will be prioritised, meaning you will receive it more quickly than if you wait to make an order. What’s more, if you already have a Scheme car, your lease will automatically be extended until your next car is ready. 

Did you know?

If your lease was automatically extended due to the COVID-19 situation, you don’t have to wait to order your next car. You can actually place your next order at any point during your lease extension.

If you have been waiting to visit a dealership before ordering your next car on the Scheme, it is well worth speaking to your dealer now to book an appointment. Dealers are very busy after reopening and appointments are likely to be limited due to ongoing social distancing measures.

Car manufacturers will be closely managing the number of cars ‘in the system’, resulting in fewer models sitting on dealer forecourts. Don’t worry if it looks like there are fewer cars at your local dealer than normal! In rare instances, you might face a change to your pre-arranged delivery date before receiving your new car, as it is moved from a remote location to your local dealer – but working closely with your dealer and keeping in touch should ensure you don’t face any surprises.

More positive news

In more positive news, the agreement of a Brexit deal between the UK and the EU means concerns over possible trade barriers have been abated. Meanwhile, the UK’s commitment for all new cars to be electrified from 2030 means interest in plug-in electric cars is growing all the while, helping improve air quality for everyone. There is an ever-growing selection of plug-in cars on the Motability Scheme, including many pure electric cars available with no Advance Payment. 

Currently there are over 60 fully electric vehicles available to lease on the Motability Scheme, including the Nissan Leaf, MG ZS, Volkswagen ID.3 and the MINI Electric. Use our Car Search tool to see the full list.

The best way to experience a pure electric car and find out if it is for you is by visiting your local dealership. Taking a Covid-safe test drive will let you experience the silence and speed of a pure EV, while most dealership have clever calculators that can show if an electric car will be practical for you to use. There has maybe never been a more exciting time to go looking for a new car.

The motor industry continues to rise to the occasion. The challenge of Covid in 2020 proved its adaptability, and the same innovative, customer-focused care and attention will help it cope with the current chip crisis. With the support of the Motability Scheme to ensure your mobility needs are met, you will still get your new car, at a price you can afford. The latest challenges will be overcome, I assure you!

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