How to deal with unusually long delivery times
‘Patience is a virtue’. This proverb has never been more relevant, now that delivery times of new cars have risen from the usual two to three months to a year and even more. This is how things stand and how we deal with it at LeasePlan.
Cause 1: chip shortages
Delays in deliveries began in the 2020 Covid lockdowns. Because car production was virtually at a standstill, many car manufacturers cancelled or sharply reduced their orders for semiconductors (microchips), which are needed for all onboard electronics. At the same time, chip manufacturers saw a sudden surge in orders from the consumer electronics industry. Working from home caused the demand for monitors, laptops, cameras, televisions, but also game consoles and smartphones to skyrocket.
When, after a while, the demand for cars rose again, car manufacturers were no longer the chip suppliers' most important customers. The production capacity that had been allocated to them in the pre-corona era had meanwhile been reallocated to other customers. Add to this a major fire in one of the most important chip factories and it is easy to understand how a dire situation got even worse.
In addition, the automotive sector mainly uses so-called "legacy semiconductors". These are actually older and less high-tech chips. Chip manufacturers prefer to invest in production lines for the very latest and also more expensive and therefore more profitable semiconductors. Even if they were to plan an additional factory, it takes two years before it is operational.
Cause 2: cable harnesses from Ukraine
While the chip crisis has not even been resolved yet, the automotive sector is facing an additional supply problem. In many cases, car manufacturers rely on Ukrainian-based producers. Leoni, for example, is the largest manufacturer of wire harnesses used in cars. Because of the war, these factories have closed or are producing at a lower rate, and the export of the goods produced has also become difficult.
As a result, almost all manufacturers in Europe have had to temporarily shut down plants and reduce production, which only prolongs the already long delivery times. As it is currently unclear when production in Ukraine will return to normal, manufacturers are trying to find alternative suppliers, but these obviously struggle to meet the extra demand.
Due to the shortage of chips, on the one hand, and of wiring looms, on the other, hardly any manufacturer can currently guarantee that the car you order will actually be delivered on the expected date. This is particularly annoying and puts the patience of customers to the test.
At LeasePlan we do everything we can to closely monitor current orders and provide the right solutions. Unfortunately, the problems are not due to factors over which we as a leasing company have any influence. If your leased car is still in good order, an extension of the lease term until the delayed delivery of the new car might be a solution. Also, try to anticipate and order your vehicle(s) at least a year in advance.
If you have any questions about this, please feel free to contact your trusted LeasePlan contact.