Why are new vans being delayed? The supply chain situation so far

If you’ve recently looked at the best new van deals with a mind to replacing one of your vehicles or expanding your fleet, you’ll probably have noticed that the lead times for vans are a lot longer than usual. We’re currently quoting around 9-12 weeks on new vans. This isn’t unique to The Van Discount Company – in fact, almost every vehicle retailer in the country (and countless more beyond) has been forced to adapt their operations to a global crisis affecting automotive manufacturing.

It’s required a dramatic rethink from retailers like us, and invariably consumers are now feeling the sting too. We appreciate that can be frustrating if you’re trying to get your business back up to pre-pandemic levels – trust us, we can empathise! – and it can be particularly vexing if nobody’s given you a proper explanation as to why this is all happening. So, bear with us as we provide a quick bit of context for some of the biggest reasons why so many buyers across the world are having to wait longer for their commercial vans.

A perfect storm

For the vast majority of us, the moment we hear words like “delays” or phrases like “supply chain issues”, our minds generally jump to one major culprit – with a name that begins with a C and ends with 19. And while you wouldn’t be wrong, the situation as it stands is actually a little more complex than that. The fluctuating costs and delays associated with new vans right now actually comes down to a number of complex, interweaving issues. Here are some of the most critical.

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The economic impact of Covid-19

Let’s get the obvious out of the way first. When the first national lockdowns hit multiple countries in early to mid 2021, the global automotive industry was struck quickly and painfully. Factories were shut down, the roads were empty, and manufacturers struggled to stay in business. Semiconductors (or silicon chips) normally used for car manufacturing were suddenly diverted to meet the huge spike in demand for consumer electronics such as laptops, games consoles and televisions, as people fought to keep themselves employed, entertained, and informed.

Then as lockdown ended, demand for cars rose sharply again. Consumers were keen to get themselves active, moving, travelling and doing business once more. Manufacturers were forced to reckon with another huge shock to the market, this time in the other direction. But now semiconductors were in short supply, having already been reserved for more lucrative sectors by their manufacturers, leaving carmakers with orders they were now struggling to fulfil.

Many were forced to deal with new problems even closer to home too, as many countries enacted drastically different policies to deal with Covid-19. Some officials had even requisitioned parts and labour from the industry to be redirected into public health measures, such as manufacturing Personal Protective Equipment.

While many of the most urgent public health programmes may have ended for most countries by now, the semi-conductor issue continues to be a huge problem for manufacturers. That leads us neatly onto…

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The Renesas fire of 2021

You may or may not have heard of Renesas. It’s a Japanese company that’s been the world’s largest automotive semiconductor manufacturer, and one of the biggest companies you never knew you relied on. It makes nearly a third of the global market share for micro controller chips used in cars, supplying global manufacturers like Toyota, Nissan, Honda and Volkswagen.

In March 2021, it suffered a devastating fire on its premises in Tokyo. The fire occurred on the first floor of the building, and its ultra-sensitive clean rooms were consumed by the blaze. While the company has now repaired most of the damage and resumed production, that left it with a huge backlog that’s had a further unwelcome impact on global supply chains, ultimately extending the time you might have to wait until you get your new van.

The 2021 flooding in Europe, and further disruption

A few months after the Renesas fire, heavy rainfall and flooding swept across countries in western Europe in mid 2021. Some of the most serious occurred in countries like Germany and Belgium, but it also affected areas in Switzerland, Luxembourg and the Netherlands. Railway links were broken, delaying shipments by train and resulting in yet more knock-on impacts to the already precarious supply chain.

That’s not to mention a number of smaller but no less decisive factors (such as the plight of the Ever Given, and its blockage of one of the world’s busiest shipping lanes), as well as the skyrocketing price of scrap metal, which has required further adjustments to the already complex strategies of automotive manufacturers.

We know – it all makes for a fairly bleak outlook at the moment, but we should see signs of the disruption easing a bit later on in the year. Until then, rest assured that here at the Van Discount Company, we’re committed to doing everything we can to help you get the vans you need as quickly as possible. When you choose us, you can still count on some of the best van deals on the market, and we regularly save our customers an average of 40% off the cost of a new van – often equating to thousands of pounds off leading brands like CitroenRenault and Vauxhall. For information, feel free to contact us!