Honda’s temporary plant closure could be “tip of the iceberg” for supply issues, warns VRA

The temporary closure of Honda’s Swindon plant due to parts shortages this week could be the “tip of the iceberg” for new car supply issues in 2021, the Vehicle Remarketing Association (VRA) is warning.

Chair Philip Nothard said that the problem, believed to be caused by poor availability of semiconductors, was potentially a sign of things to come from all manufacturers.

He said: “Car manufacturing is based on incredibly complex and geographically diverse supply chains all clicking perfectly into place at the right time. Any disruption to those processes can bring the production line grinding to a halt.

“Several manufacturers worldwide, certainly not just Honda, are reportedly having issues with semiconductor supply as a knock-on effect of the pandemic but our concern is that this is just the tip of the iceberg.

“While there is new car stock in the pipeline, there is a strong argument that we are only now really starting to see the impact of the coronavirus crisis on supply and it could be that we will see a range of other problems throughout the year.

“The positive effects of vaccination programmes globally will probably not be felt until the second half of the year and there is potential for all kinds of lockdown disruptions across the world to affect car making.

For UK manufacturers, the situation is complicated by Brexit and the bedding in of new import and export arrangements that were being constructed “almost on the fly”, according to Nothard.

“We’re obviously very pleased to see some form of trade deal in place, it is much preferable to no deal, but the whole thing was very last minute and many of the practicalities are being sorted out in real time, which is not ideal. Everyone is aware of issues with queues at major ports and shortages of shipping containers,” he said.

The knock-on effect of new car supply issues will be felt by the remarketing sector in years to come. Nothard believes the used car market is unlikely to be affected in the short term, but there will be fewe vehicles available in the future.