THE CURRENT SITUATION ON THE CAR MARKET

Lack of chips, harnesses or access to commodities makes buying a vehicle extremely expensive

Did you know that car manufacturers are once again cutting back on production, cars are becoming extremely expensive and delivery times are stretching to over 12 months.

This, too, is a consequence of the crisis in Ukraine. Car manufacturers in Europe have not yet recovered from the chip crisis caused by the COVID-19 pandemic and are now facing a new challenge in the form of a shortage of wiring harnesses. Indeed, Ukraine is a key supplier of wiring harnesses to all major car manufacturers in Europe. At the moment, production is still underway, but the last available stocks are being drawn down. This is also why some car companies are already suspending production as they are unable to assemble the cars they produce.

This applies, for example, to the Volkswagen plant in Bratislava, which is already cutting production and preparing to reduce the volume of vehicle production. The cable harnesses are needed directly in the vehicle production process and cannot be assembled later when the vehicle is completed, as was the case with some additional equipment elements due to the lack of chips.

This shortage is seriously affecting production capacity across Europe, putting even more pressure on the production price of the vehicle itself. The car is already becoming a luxury good out of reach for the masses. The situation is beginning to be similar to what we remember before the year 2000 in our own country.

The pandemic is showing us that the just-in-time manufacturing and supply process is proving to be ineffective in the event of supply chain failures, and so car manufacturers will have to come up with a solution for keeping raw materials and parts in stock as soon as possible. However, this will make production considerably more expensive.

There is likely to be an even more significant impact on car prices in the summer and autumn months of this year. For the next month or two, the market could still experience a potential oversupply of cars in Europe, as car companies such as FORD, VOLVO, BMW, AUDI and others have already announced a complete ban on vehicle sales in Russia. The question is whether there will actually be a surplus or whether it will just satisfy the demands of clients who have already been waiting for more than a year for their ordered car.

The way out of this situation may be for people and companies to rent a car, when the worries of procuring a vehicle and the overall operation fall on the head of the service provider. Whether short-term, medium-term or operating lease, renting a vehicle can be an ideal solution in the truly uncertain and economically untenable situation that the car market finds itself in today.

Check out our range of vehicles for long term rental HERE. These cars are immediately available and we guarantee unbeatable prices.