Car traders brace themselves for deeper supply chain crisis

Delays in model launches, longer delivery timelines

Christopher Tan Senior Transport Correspondent Retiree Steven Chia placed an order for a Mercedes-Benz GLB from authorised agent Cycle & Carriage last September, and waited seven months for it to be delivered more than double the usual time.

Mr Chia, 62, said: “I was supposed to collect my car last December or January this year, but I was told that because of the Covid-19 lockdowns and the war in Ukraine, shipment was delayed. I finally got my car on April 23."

For motorists looking to buy a new car, be prepared to wait possibly as long as Mr Chia, if not longer.

Carmakers reeling from supply chain disruptions brought about by the pandemic are now facing another whammy the prolonged war in Ukraine.

The Eastern European country, invaded by Russia in February, is a major supplier of automotive parts - from electronic components to seats to wire harnesses, which bundle kilometres of electrical wires in a vehicle.

The conflict is disrupting production, and this is affecting more than a dozen vehicle manufacturers, including Volkswagen, Audi, Porsche, BMW and Renault. Unlike the chip shortage, which manufacturers could overcome by leaving out certain features, a vehicle cannot be assembled without wire harnesses.

While Japanese and Korean manufacturers are less affected, the war also has other indirect consequences like raw material costs, which is impacting the entire industry.

Associate Professor Tan Yan Weng, head of the Logistics and Supply Chain Management Programme at the Singapore University of Social Sciences' (SUSS) School of Business, said car buyers can expect delays of new model launches as well as longer delivery timelines.

“For certain makes of cars, a lead time of three months may now be six to eight months,” said Prof Tan.