By Leland Kroll
Buying or leasing a new or used car can be a frustrating and expensive process in these trying times.
What Do I Mean by this Statement?
Due to COVID, there have been severe supply chain shortages of computer chips and various components that go into each new vehicle built.
The most current obstacle is a shortage of wiring harnesses. Many of these wiring harnesses are manufactured in Ukraine and account for 7% of the harnesses used in vehicles built throughout Europe. Not all of the vehicles manufactured in Europe are exported to the U.S.
How Does a Ukraine Manufactured Part Impact My Decision to Buy a New Car?
A wire harness is a robust set of parts that neatly bundle up to 3.1 miles of cables in the everyday car. Unique to each car model. Still, no vehicle can be built or be used without them!
According to an analysis done in 2020 by the Comtrade data consultancy AlixPartners, wire harnesses were Ukraine’sUkraine’s most critical automotive component exported to the European Union, accounting for nearly 7% of all imports of this product.
The Ukrainian government figures show 22 automotive companies have invested more than $600 million in 38 plants – many, though not all, are producing wire harnesses, employ over 60,000 Ukrainians.
These harness producing plants are close to car factories in Germany and the low-cost manufacturing hubs that German carmakers, particularly, have built-in central Europe.
“In cases like this where the issue is not likely to go away quickly, automakers will need to seek alternative solutions for the short- and mid-terms,” said Sam Fiorani, vice president of global vehicle forecasting AutoForecast Solutions.
It could take several months for suppliers to increase capacity at other locations – requiring factory space, machinery and tools, workers, training and financing.
How Does This Impact the American Automotive Marketplace?
First, there will inevitably be a shortage of various models offered by Audi, Aston Martin, Bentley, BMW, Lamborghini, Mini, Mercedes, Porsche, Rolls Royce, and VWs imported to the U.S.
The impact of these shortages will be higher prices charged by dealers for any of the models manufactured in Europe that might be in the dealer’s current inventory. In addition, higher fees are charged by dealers for these identical vehicles that are used vehicles, and there are possible delays in getting a replacement wiring harness if your vehicle needs repair or is involved in an accident.
So, What Can You Do?
Unfortunately, as a consumer, there isn’t much you can do. If you have ordered a new vehicle and have been told that it should arrive in the Spring or Summer, you can contact your dealer and inquire (and continue to do so) about the status of your production date. If you haven’t ordered a vehicle from any of the manufacturers impacted by the war in Ukraine, go to your local dealer and read the car “Sticker” that’s posted on the window and read what the percentage of parts are sourced by country of origin and where the vehicle has been manufactured. This may indicate the possible delays that can be expected if you want to wait for your dream car to arrive or purchase a vehicle already in stock.
Be patient and try not to settle on a vehicle that you may not be happy with!
