Growing number of car buyers awaiting deliveries, some through 2022
Current demand for cars far outstrips production and delivery schedules. This is largely attributed to parts shortage. With semi conductors being in short supply, most companies had had to resort to controlled production schedules to keep pace with lower stocks. And while the chips shortage isn’t going to be resolved overnight, the delays it brings have amplified supply delays.
Demand for cars has been boosted by top-selling models continuing to be popular. And then there have been new launches that have proven to be popular considering initial booking numbers. But car deliveries in the face of steady demand continue to be staggered. Following months of uncertainty owing to Covid19 lockdowns and businesses stalling, the economy bore the brunt of it all.
Demand for cars
Finally when things steadied, demand for cars grew. In fact, some manufacturers have been able to report growth in recent months. This is on account of low base sales volumes in 2020, and increased demand in 2021.
Anxiety for one’s wellbeing has been a top concern for ‘most everyone. This has seen folks stabilise commute options by turning to personal vehicles. Over time, the focus on car purchases has also brought into its scope the need for safer cars.
Maruti Suzuki India has the highest waiting order book at 2.5 lakh. This is followed by Hyundai, Tata and Mahindra – each of whom have a waiting order of 1 lakh each. Kia has 75k buyers waiting while MG has 46k buyers. VW, Skoda, Nissan, Renault, Audi and Merceds have close to 80k pending orders in total.
While one can depend on disposable incomes to support an increase in car purchase capability, those in the market should be prepared to pay a higher price by the time their deliveries comes through. Considering a constant rise in input costs, manufacturers have resorted to small price hikes through the year.
Some have already announced the same for January 2021. As delivery dates gets postponed/delayed, buyers can expect to pay more for their purchases. This is because the final price will be the one applicable at the the time of delivery, and not the price one was quoted at the time of booking.
Shortage of semiconductors/chips
Depending on demand, delays, and production capacity, certain cars are now scheduled to be delivered after a year. This would also result in a small number of booking cancellations. However, this being part of business processes, manufacturers don’t view the small number of cancellations against total bookings as a snag.
To reduce buyer anxiety, dealerships are tasked with providing buyers with constant updates, and assurances. Customer service will be of utmost importance in the current scenario considering months of waiting is tedious for one and all. With no clarity on when or how quickly the semi-conductor shortage will be sorted, ramping up production to meet delivery backlog isn’t an option.