Octane Vehicle Leasing

Automotive News - March 2022 Market Update

Posted in On 17/03/2022
Automotive News - March 2022 Market Update

With the automotive industry ever shifting, we thought we would bring you up to speed with the latest news. Read on to find out more.

Ukraine

The big topic in the news is the Russian invasion of Ukraine.

There are many issues arising within the industry that are being heavily impacted by the Russian invasion of Ukraine.

Both countries are major players in the manufacturing and production of key elements such as rhodium and neon gas, which are used to manufacture semiconductor chips.

With semi-conductors already in high demand, the stock available is being tested even more due to the ongoing situation.

If the conflict is prolonged even further, the shortage will become worse. The global manufacturers are closely following this, however, there is uncertainty as to what extent the industry will be hit.

Several manufacturers are affected, local reports suggest that Audi’s factory in Győr is experiencing significant issues with the supply of spare parts. Other manufacturers such as Mercedes-Benz are transferring their production to other plants to spread the demand.

Many customers aren’t aware of the impact, however, Russia exports 80% of its steel to Europe – This could have a huge knock-on effect when it comes to manufacturing parts for new vehicles. The likes of Volkswagen, Porsche, and BMW are also struggling to obtain the wiring looms from their western suppliers from Ukraine.

Ukraine Flag

 

New Plates

The news isn’t all doom and gloom, however!

From March 1st, newly registered vehicles will have 22 on their number plate. The new plates are released every six months with the 72-plate becoming available from September 1st.

In 2021, there was a new standard of number plate released called “BS AU 145e”. This is the new standard for retroreflective number plates. These plates are made of a tougher material, making them more resistant to damage.

We have already seen a huge uptake in our customers taking up business and contract hire vehicles on the brand-new registration, as well as more stock becoming available on our pre-current offers, registered on the 71 plates.

 

Semiconductors

We are feeling a slow shift with the shortage of semiconductors. Before the Russian Ukraine conflict, the semi-conductor market was beginning to grow. Several companies have since expanded their manufacturing capabilities – Although the effects might take some time to be felt. Technology giant Intel has recently announced a $30bn investment into the manufacturing of the World’s most advanced chips.

This includes a brand new $17bn site in Germany, to put the EU at the forefront of semiconductor manufacturing. They have also announced a $12bn investment into expanding their current Ireland location.

The construction of the Germany plant will begin in 2023, with the production planned to begin in 2027.

Unfortunately, the semi-conductors that are used in many global manufacturers are highly complex and precise instruments. This means that it takes time to develop an operating facility. However, the future is looking bright for when these plants are up and running.

 

Semiconductor

 

New Car Sales January

January 2022 saw a +27.5% increase in new car registrations. There was a positive start to the automotive sector in the United Kingdom with 115,087 newly registered cars in the first month of the year.

With over a quarter increase since the global pandemic shut down showrooms, it is a positive movement. The industry is still operating below pre-pandemic levels of -22.9% in January 2020.

There has been a dramatic shift in the sorts of fuel types, with a -45.8% dip in diesel cars being registered in January 202 and a huge uplift in battery electric vehicles. There were 14,433 new electric vehicles registered in January, which represents a 130.6% growth for the segment.

Hybrid electric vehicles also saw a 98.1% jump, with a total of 13,492 cars being registered.

 

Used Cars

Used cars have been on an upward trend for the last 12 months, with no apparent end in sight. However, industry experts have predicted that the bubble for used cars is expected to drop towards the second half of the year. Now, nobody actually knows how the market will change this year. However, with used cars at a record high, it could be worth thinking about your next car. 

The benefit of leasing is your fixed monthly rentals. We can quote you on any make and model within our huge network allowing you to choose the best deal that suits your requirements. With leasing, there are no hidden surprises - Regardless of what the used car market is doing, your lease deal will remain the same throughout the contract. 

We can also offer you fixed maintenance rentals, giving you peace of mind throughout the entire length of your contract.

 

2022 going forward

The good:

Many experts within the automotive trade predicted that by Q2-Q3, the market would begin to produce cars, vans, and LCVs at a rapid rate. By Q4 it was predicted that the current shortages will have a minimal impact on the industry. We are slowly coming out of the pandemic; most factories are up and producing new vehicles as well as catching up with the backlog caused by the coronavirus.

Manufacturers such as Jaguar Land Rover have thousands of part-built cars sat and ready to complete their build. They are currently one of the worst-hit brands, however, even these predict that by Quarter 4, some normality should resume.

 

The bad:

With the ongoing conflict, the shortage of vital parts that come from Russia and Ukraine is yet to be felt. We are unsure what knock-on effect this might have, and unfortunately, it is a bit of a waiting game.

Motorists are more than aware of how the price of fuel has jumped to record highs and is predicted to continue to skyrocket. This is having a global impact, including the fuel the manufacturing plants require and the modes of transport to deliver the vehicles. Unfortunately, the increased costs might be passed onto the customer further down the line.

 

What do we know?

Well, here at Octane Vehicle Leasing, we are continually watching the market. We are having daily discussions with manufacturers and our huge network of dealers. As soon as we find information out, we are passing that straight onto the customer.

We believe in being transparent with every single client, not only does this inform you but it also helps you make decisions. Our team is here to help you throughout every step of the process.

We are also negotiating deals with our suppliers to bring the most competitive rates to the market, giving all our customers the best possible leasing deals around.

If you are in the market for a new car, van or LCV then contact us. We are here to help you! If you have a car on order with us and are unsure about anything, give your representative a call who will be happy to help.

Get In Touch:

Telephone: 0161 543 8811

Email: info@ovl-ltd.com

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We look forward to hearing from you soon.

 

 

Sources:

Autocar.co.uk: https://www.autocar.co.uk/car-news/business-tech%2C-development-and-manufacturing/car-industry-reacts-russian-invasion-ukraine

Smmt.co.uk: https://www.smmt.co.uk/2022/02/january-new-car-market-gets-electrified-boost-but-headwinds-constrain-recovery/

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