As 2021 draws to a close, we reflect on the highs and lows the motor industry has faced this year and explain how the changes are affecting thousands of drivers.
Well that’s almost another year over and it’s certainly been a challenging one – especially so for the UK’s automotive industry. As a nation that relies heavily on our vehicles, we simply can’t afford to be without them. Unfortunately though, this year has thrown several curveballs at the motor trade that have affected everyone from manufacturers and dealers, to repair centres and drivers.
Here we recap on the biggest challenge facing the industry as a whole – the ongoing shortage of vehicles and parts – and how it will impact you as a motorist. We also share some great industry news, our top motoring tips and our achievements as a company. But first, let’s get the bad news out of the way…
The bad news
Manufacturers and new car dealers
Manufacturers have been hampered by a global shortage of components, especially semiconductor chips, due to supply being diverted away from the motor industry. Semiconductor chips are electric circuits that are used in thousands of tech products. In vehicles, they control a number of critical functions such as safety features, power management, sensing and road control.
This shortage was a result of the huge demand for personal computers, tablets and smartphones since the first lockdown began almost two years ago – plus the surge in gaming equipment following the launch of the PlayStation 5 and Xbox Series S/X.
Due to these supply issues, many manufacturers including Jaguar Landrover, Renault, Nissan, Mitsubishi and the Volkswagen group have sadly had to slow or halt production this year, which has put an enormous strain on their franchised dealers selling new vehicles. According to industry analysis company IHS Markit, global production could stand to be cut by a staggering 700,000 vehicles per year unless supply improves soon.
Used car dealers
As a knock-on effect, many drivers have chosen to purchase used vehicles this year instead – but this has presented its own set of problems.
The demand for used cars especially is far outweighing supply, making it extremely difficult for dealers to get hold of quality stock at reasonable prices. This surge has also driven up auction prices – and subsequently retail prices – to an all-time high, meaning that many consumers are being forced to either rethink their budgets or keep their vehicles for longer.
Vehicle repair sector
It’s not just semiconductors that are in short supply. Other parts including wiring and harnesses, headlights and even body panels are having to be ordered from overseas due to a lack of UK stock – which, coupled with the shortage of delivery drivers, has resulted in long delays.
Add to this reduced staffing levels at repair centres due to illness and isolation requirements, and you could find yourself waiting weeks for repairs to be carried out on your vehicle.
It’s a strange time for everyone, and we all need to take precautions if we want uninterrupted motoring. At the end of this article, we share our top tips for maintaining your vehicle over the winter and reducing the chance of it needing repairs. For those of you looking at changing your vehicle in the new year, we also share our used car buying checklist. But before that, let’s cover the good industry news…
The good news
Despite the uncertainty, there have been some great achievements in the motor industry.
The demand for electric passenger vehicles has rocketed over the past couple of years with many drivers opting for lower maintenance, greener and cheaper alternatives to petrol and diesel models. Sales of battery EV cars increased by 186% in 2020, and by the end of this year, it’s projected that 1 in 10 new cars in the UK will be electric. There are currently 300,000 EV’s on the road in the UK alone, plus another 600,000 hybrids. The government has also invested an additional £20million into EV infrastructure, which is set to double the number of ChargePoints to 8,000.
Vehicle finance companies have kept the market moving with innovative services that improve the customer experience.
Just one example of this is their ‘Click and Collect’ platforms, enabling customers to reserve or buy a vehicle through the dealer’s website. Customers can build their own finance deal, get approved within minutes, complete the transaction and even add on optional extras such as extended warranties or paint protection – without leaving the comfort of their own homes.
Technology is advancing rapidly in the automotive industry and it’s great to see companies staying ahead of the curve by catering for changing consumer needs.
Of course, we can’t forget those dealers who are powering forwards by going the extra mile. Despite a tough trading year, many dealers have used the pandemic as an opportunity to enhance their customer care and identify other areas where they could add extra value.
We’ve seen a huge increase in the number of longer term warranty and breakdown packages over the last few months especially. This is due to customers keeping their vehicles for longer and wanting that continuous peace of mind against unexpected repair bills.
There’s also been a big shift towards creating a more personalised car buying experience. Dealers are using technology such as personalised vehicle videos and automation software to build better relationships, streamline the customer journey and provide relevant, tailored content, such as budget guidance and vehicle maintenance advice for their model.
It’s been a brilliant year overall for us at Warranty Solutions Group as we continue to experience phenomenal growth.
Our mission has always been to be the UK’s best used vehicle warranty provider, not the biggest, and that’s why hundreds of quality motor dealers across the country have already chosen us to protect their customers – with more joining us every day. We’ve also expanded our offices four times this year, and were shortlisted for not one but the two most prestigious awards in the industry (both Warranty Provider of the Year at the Motor Trader Awards, in both the independent dealer and franchised dealer sectors).
We’re determined to keep setting the benchmark and driving up industry standards along the way, with brilliant products and services that do exactly what they promise. Your pride and joy is in safe hands.
What does 2022 hold for the UK motor industry?
We’d love to say that we think the market will return to normal next year but unfortunately that’s unlikely to be the case. Our prediction is that used car prices will only continue to rise if the new car situation doesn’t improve soon, which would worsen the market further. Some manufacturers such as BMW have already started to put alternative plans in place to ensure continuity across their supply chains, and we can only hope that others do the same before it’s too late.
Like them or loathe them, electric vehicle sales will continue to boom, especially with London expanding its Ultra Low Emissions Zone (ULEZ) and more drivers becoming environmentally conscious. We may also start to hear about the development of more hydrogen powered models which only emit water – but there’s a long way to go until the infrastructure is in place. There are currently only three hydrogen powered models available in the UK.
There will most definitely be more technological developments – not only in vehicle electronics but also in the way dealers communicate with customers. The demand for extended warranties will also continue to rise, especially with the uncertainty in the market as it stands.
Our top tips
Changing your car
If you’re looking at changing your vehicle in the new year, follow our car buying checklist to make sure you’re buying from a reputable dealer.
- Trustworthiness. Read the dealer’s reviews – and their responses – on independent sites such as Google, TrustPilot, AutoTrader and CarDealerReviews. This will give you a clear picture of the way they operate and their customer service.
- Background check. Once you’ve chosen your vehicle, make sure the dealer has carried out a full background (provenance) check on the vehicle. This is to rule out any previous issues that may not be obvious, such as an outstanding finance agreement or the vehicle having been written off or stolen. Many background check providers also include a mileage verification.
- Mechanical inspection. Many dealers will check the vehicle over before you buy to make sure it’s safe, legal and not in need of urgent repair. The level of inspection varies between dealers, but at minimum they should be checking the engine, gearbox, clutch, suspension, steering, braking system, cooling system and camshaft timing belt / chains.
- Don’t expect a discount. Now is not the time to haggle. It’s a tough market at the moment and used car dealers generally just aren’t in a position to negotiate. So you may be disappointed if you’re expecting to pay a lower price.
- Warranty and breakdown cover. The vehicle should come with a quality used car warranty and breakdown package to protect you from unexpected garage bills and keep you moving. Warranties vary enormously between providers so always look at the documentation before you buy to make sure you’re getting the best cover for your vehicle’s age and mileage.
Car maintenance tips
If you’re keeping your car, you’ll want to make sure it’s healthy and reduce the risk of it needing repairs, especially with the current parts shortage. Here are our top vehicle maintenance tips.
- Get any problems fixed now. Don’t wait for the weather to get worse as it could make a small issue ten times bigger, resulting in bigger garage bills. If you have a warranty in place, it may also be invalidated if you ignore any warning lights or known issues.
- General maintenance. Make sure the antifreeze, coolants, oils and lubricants are topped up, especially if you’re planning on a long car journey. Also regularly check your battery, wiper blades, tyre treads and tyre pressures.
- Be prepared. Carry essentials with you just incase you do breakdown. We recommend warm clothing, a blanket, sensible footwear like wellies, drinks, snacks and a mobile phone charger – plus ice scraper, de-icer, warning triangle, torch and a shovel for snowy conditions.
Finally we’d like to thank all of our dealers, partners and customers for supporting us. We hope everyone has a wonderful Christmas break, and we look forward to assisting you next year.
From all of us at WSG
The warranty company that cares!
P.S If you found this article useful, please share it on social media to help other motorists. As always, our team are on hand to answer any questions, so just reach out if you need us.