The motoring industry and the current global situation

Where are we right now?

We’ve all been following the news (unless you’re Jared Leto and have been on a retreat in the desert with no phone), so you already know the ins and outs of what is going on when it comes to health, social distancing and many working from home in isolation.

This article is not about that! If you want to find out more about how OSV is working during this unusual time then we have a few videos you might find interesting on our social media channels.

No doubt you’ve been keeping up to date on how the rest of the world is working (or not), but if you’re thinking about getting a new car, do you know what’s happening in the world of vehicle manufacture right now?

The majority of vehicles available to purchase in the UK are made in mainland Europe, in the UK or in South Korea. However, as we mention in our article Where’s my new car coming from? it’s not only about where the car is put together, but it’s also about where all the components come from. In that article, we use the example of the popular Ford Focus to highlight that while the vehicle is actually put together and imported from Portugal, the components that go into making the vehicle are sourced from multiple locations, including Spain and Germany. If one part of that process is stalled because of shortages or temporary closure, the rest of the manufacturing tasks are unavoidably delayed.

Until now, factory closures have been staggered. As things get back to something resembling normality in Asian countries such as China and South Korea, the UK is starting to experience the consequences that these closures will have on our own supply chain. We know that the supply chain is going to be affected. Not only was the UK headed into Brexit, the effects of which have yet to be understood, especially where imports and exports are concerned, but now we have a lack of product to contend with.

How does this affect my vehicle order?

At the beginning of what is now becoming quite clearly a global crisis (not only in the motoring industry but also for travel, entertainment and commercial businesses in general) the issue was the supply of components. China has, for a very long time, been a core supplier of vehicle parts, not only for the UK but for other manufacturers across the world. They were the first country to reduce production. They have a very determined workforce and things will pick up again.

At one point, not that long ago, Jaguar Land Rover was rumoured to be transporting parts in suitcases from China that they could use in the manufacture of their vehicles in UK plants. The company had already been very upfront in admitting that they were experiencing a shortage of supplies, primarily the batteries for their all-electric i-Pace. With Chinese supplies drying up this shortage was no longer restricted to that one item and they had to adapt. This led to partial closures. Jaguar Land Rover has only just closed its production plants in the UK.

Supply chain - Manufacturing cars - the supply chain

Right now the issue has grown much larger than just the sum of smaller parts. With plants across Europe calling a halt to work we are going to start seeing a slowdown in the supply chain. For a brief period, there will be a lower number of vehicles available for purchase and lease. However, this is a temporary situation, factories that are shutting down are doing so for set periods of time. In many cases, opening dates have already been announced.

In need of a vehicle?

It’s ok, we still have stock vehicles available to finance, lease, purchase or for short term rentals

We’ve all seen it on the high street and in our local supermarkets. People rushing to the toilet paper aisle or heading to get a few more cartons of long-life milk only to find nothing left but the packaging the items came in. But we have been repeatedly reassured that supplies are not going to dwindle, that we are not going to run out. And, sure enough, it may take a few days, but toilet paper and long-life milk are indeed back on the shelves and the whole cycle starts again.

We aren’t saying that the supply of new vehicles is exactly like a multipack of Andrex (other brands are sometimes available), but we are saying that things will pick up.

What can I do?

At the moment things may seem hopeless. The news is constantly full of rather negative and depressing headlines that declare one business or another is in trouble and we’ve all read about the need for social distancing. We know that people aren’t sure what’s going to happen from one day to the next, but if history has shown us anything, the human race is very resilient and we will get through this.

If you’re anything like us then you’re already in planning mode. You’ll know what you intend to do for your family, or your business, so you’re already looking ten steps ahead. When this is all over you’ll still need your new vehicles. If you’re looking at a fleet it may be smaller, but you’re still going to be looking for a new vehicle.

They say that patience is a virtue, but playing the waiting game can be frustrating, so why not be the one at the front of the queue?

Yes, factories are closed, but it’s temporary. Many of these businesses such as Peugeot, Citroen, VW, Ford and Mercedes-Benz have survived much worse than this and the lessons they learned as their factories were commissioned to build weapons or shut down entirely, was that they had to adapt.

Supply chain - doors on the production line

When they are able to reopen they will be playing catch-up, but they will reopen. They have skilled workforces, there are orders to fulfil and they are all businesses. Right now, like other industries across the globe (everything from the movie industry which is closing film sets, pushing back release dates or finding alternative methods of getting their movie in front of a paying audience to the gyms that are reducing class sizes to aid in social distancing) the motor industry is changing the way it works. No one can predict what effect this will have in the long term, but we do know, from past experience, that the business will pick up.

Now is the time to plan. We need to be optimistic, have something to look forward to. Let us help you find it.Here is how we’ve been helping people so far…

  • Putting cash in their bank by financing existing vehicles and assets
  • Offering 3-month rentals instead of 3-year leases
  • Providing express delivery on used and new vehicles
  • Supplying vehicles on finance, lease and purchase

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