With the pandemic forcing a halt in car manufacturing last year combining with the current shortage of semi-conductors, the new car industry has taken a huge hit over the last 18 months – and is still paying for it. But what does this mean for the used car industry? 

If you read our previous article you will know about the shortage of semiconductors; tiny computer chips, that are essential in new cars for everything from infotainment systems to safety features. When the pandemic first hit and car manufacturing was forced to stop, these semiconductors were diverted into other industries. But when production started back up again, the supply of semiconductors didn’t spring back as might have been expected. Now, due to this shortage, the production of new cars has been unable to bounce back as quickly as hoped – with a possible knock-on effect for the next few years.  

How can this be a good thing? 

While this may be bad news for car manufacturers, it’s great news for used car dealers. Due to the lack of availability of new cars, the cost of used vehicles has risen. Recently the ONS inflation rate for used cars hit 4.4% for June alone. Buyers have even gone as far as attempting to gazump each other, offering sellers above the asking price even after cars have been marked as sold.  

With competitors such as Cinch delivering used cars across the UK, many car dealers have had to step up their game to keep up. Especially during the pandemic, it was more difficult to get hold of cars that were not in your immediate area. So, many companies have expanded and now deliver cars to make it easier for buyers. For example, Nuneaton Cars made the decision to invest in delivery services and did virtual test drives with potential customers. 

What does this mean for the new car industry? 

This demand proves people that want to buy cars, and when more new cars become available this should benefit new car sales too. It also signals that people are still reluctant to take public transport, most likely due to concerns around catching Covid -19, so they are still eager to drive, which is another positive development for the sale of new cars and should continue to boost sales of all cars. 

Back to ‘normal’ 

It’s difficult to say what the new normal will be and we may never be able to fully return to life as it was before the pandemic. But with restrictions loosening up and people becoming vaccinated and less wary of Covid, the hesitation to use public transport should slowly abate. However, that said, the culture shift towards a new awareness of the need for hygiene to protect health should continue to stand the car industry in good stead as people make the choice to travel in the privacy and safety of their own vehicle.  

NVH solutions for the motor industry 

For more information about Interflex’s products and services, including NVH and sealing solutions for vehicles including door seals, interior trim, under carpet and boot seals, please call us on 01949 861 494 or email sales@interflex2000.com