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Ukraine crisis set to add to new car delivery delays

New car buyers face even longer waits due to Russia's invasion of Ukraine

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UK consumers wanting to buy new cars could be facing even longer waits due to the Ukraine crisis.

Shortages and higher prices of essential raw materials needed on production lines caused by the invasion ordered by Russian president Vladimir Putin are likely to add further delays to car production, already hit by the global shortage of semi-conductor chips.

Ukraine is a prime exporter of neon gas, which is an essential part of the production process of the chips used extensively in new cars. Automotive production has already been badly affected over the past year by the microchip shortage, caused by manufacturers in the Far East closing their factories during the Covid pandemic.

Russia is also the world’s third-largest producer of nickel, used in the lithium-ion batteries of electric cars, while around one fifth of the palladium used by the German automotive industry to make catalytic convertors also comes from Russia.

Meanwhile several European manufacturers building cars sold in the UK, including BMW, Renault and Volkswagen, are already suffering production delays and suspensions due to Ukrainian component manufacturers being unable to maintain supplies.

VDA, the German automakers association, warned that the invasion, and the sanctions imposed on Russia as a result, would leave the car industry facing long-term shortages and higher prices of raw materials. According to statistics specialist GlobalData, nickel prices have increased by 21% since the end of 2021.

New figures from the Society of Motor Manufacturers & Traders (SMMT) showed that UK car production numbered just 859,575 vehicles in 2021, the lowest number since 1958, and even before the invasion of Ukraine the chip crisis was expected to continue for some time – on 23rd February, Mini was forced to again suspend production at its Oxford factory for several days due to a lack of chips.

Car dealers have been facing increasingly angry customers as their chosen models were either delayed by as much as six months, had options removed or were even removed from sale.

Suzuki GB director Dale Wyatt told The Car Expert that deliveries had been badly affected by the chip shortage; “we’ve been running at around 50% of normal production capacity and we are very concerned at potential further delays caused by the Ukraine crisis,” he said.

However, he added that dealers had reported that generally customers were being very understanding of the issues. “We’ve been trying to keep them as informed of the situation as possible and that has helped – I think what really irritates customers is voids of silence.”

The new delays could also have repercussions for Government-led programmes to encourage the switch to electric cars (EVs). The UK Government plans to ban all sales of non-electric new cars by 2030, by which time Germany plans to have 15 million EVs on its roads. But GlobalData predicts that the ongoing shortages and price rises could make it very difficult for manufacturers to produce enough cars at competitive prices to hit such targets.

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Andrew Charman
Andrew Charman
Andrew is a road test editor for The Car Expert. He is a member of the Guild of Motoring Writers, and has been testing and writing about new cars for more than 20 years. Today he is well known to senior personnel at the major car manufacturers and attends many new model launches each year.