Supply chain issues inflicting ‘reputational damage’ on car dealers

Supply chain issues causing delays for new car deliveries are causing greater reputational damage to franchised car retailers than their manufacturer partners, a car buyer survey has revealed.

Nearly half (48%) of consumers considering a new car purchase told Close Brothers Motor Finance (CBMF) that delivery delays negatively impacted their perception of motor dealers, while 46% said long delivery times damage their view of car brands.

Lisa Watson, CBMF’s director of sales, said it was disappointing to see unavoidable supply chain delays taking some of the magic out of the car buying process, adding: “It’s clear that, through no fault of their own, dealers are facing the brunt of supply chain challenges.”

While two-thirds (66%) of potential car buyers said that they understood the difficulties involved six-in-ten buyers (59%) highlighted the customer experience challenge faced by retailers, stating that delay were taking the excitement away from getting a new car,

Many customers frustrations stem from uncertainty about when their vehicle might arrive, CBMF found, with 45% stating that dealers had been unable to supply them with accurate lead times.

Watson said: “The whole sector is working hard to improve lead times. Our consumer research shows dealers should work with buyers and manufacturers to ensure everyone is informed about the process. Some compromises might be possible to get cars on to customers’ driveways as soon as possible.

“This is particularly important at a time when prospective buyers, who may already be put off by delivery delays, will be considering their purchases even more carefully because of the impact of the cost-of-living crisis.”

Earlier this year AM magazine featured a special News Insight feature report detailing the impact of Russia’s invasion of Ukraine on the automotive supply chain and car retailers.

In his monthly Market Intelligence column, meanwhile, AM contributor David Francis said that the war had “thrown a hammer and sickle into the works” of 2022's car manufacturing recovery.

Last month’s new car registrations data from the Society of Motor Manufacturers and Traders (SMMT) showed that the UK had suffered a fifth month of consecutive decline in registrations in August, exacerbated by semi-conductor shortages and global conflict.

“The automotive sector has had another tough month and is drawing on its fundamental resilience during a third consecutive challenging year as the squeeze on supply bedevils deliveries,” said SMMT chief executive Mike Hawes.