What’s Happening to the Mobility Industry Despite Supply Chain Issues?

cars

The mobility, automotive, and car dealing industries are no exception to the ongoing global challenges of supply chains, and it’s been the hardest since the pandemic struck. 2021 has been a year for unpredictable agony for the mobility industry by new areas of cooperation for finding ways to overcome the supply chain crisis.

Changes in the industry

Some company heads within the industry think that OEMs (original equipment manufacturers) were the first to be affected. Growing into collaborating with other suppliers and designers, and down to smaller suppliers and sellers. Demands of clients and customers, inflexibility of schedules, and commercial regulations are parts of the issue.

At the peak of material and labor shortages and delays, automobile manufacturers increase their prices and remove incentives. However, in most cases, they don’t mean to; their willingness to relieve their suppliers was long gone. Instead, they encourage suppliers to create raising levels of cost protection in new deals.

Since the prices are rising unexpectedly—prices of commodities and transportation—all over the world, the economy still grows from these issues. Auto suppliers and any other employers in the industry have also been forced to increase their wages to attract and retain employees since lack of talent is one of the issues that resulted from the crisis.

This huge change of momentum for the industries has been creating more challenges for them, yet not hesitate to innovate and change their ways to get back up again. Making changes within the market, technologies, and regulations.

The mobility demand is rising again, and many customers around the world are starting to travel more again. Even so, some surveys claimed that some people tend to less travel because of the still ongoing pandemic, and their choices of mode of transport may differ from before. While the industry in technology is still in existence, innovations in ACES (autonomous driving, connectivity, electrification, and shared or smart mobility) technologies get themselves on top of the problem and keep going.

Automotive OEMs work together to fight the supply chain crisis

Companies in the U.S. are developing solutions to help automotive suppliers to manage their programs better. Whether it’s about material shortages, weather interruptions, rising prices, or pandemic shutdowns, it always comes back to the issue of supply chains. Raw material supplies, such as aluminum, rubber, thermoplastic resin, and steel supplies, had become unreliable during the crisis.

Despite this, the entire industry has adopted unexpectedly quickly and adopted new ways of inventory practices. Even though delays and interruptions are still happening, they can always turn it around to satisfy their clients and customers. Even metal and steel suppliers and plastic molding companies are starting to order their materials further into 2022. This is done with the prediction of customer orders and the hopeful sight of steadying prices and supplies.

Test drives have been refused

test drive

The buy-and-sell industry has obviously been having problems as well. With the semiconductor shortage, the companies are shaken up about the car shopping and selling process. Buyers have started to pre-order vehicles, which hadn’t been a thing in the field until now, while dealers are having trouble finding cars to sell. The global industry of car dealing experienced a massive drop from 80 million vehicles in 2017 to under 70 million this year.

The crisis has made them change their way of business in a much different way than they’re used to. They had to adjust rapidly to catch up and make sales somehow. Car selling establishments usually receive 50 or more cars. But in 2020, some only received less than ten cars in a month.

Customers nowadays no longer come into a vehicle store and request a test drive like they used to. Now, it’s all about online selling through the manufacturer’s website. They only contact stores with orders or if they’re looking to figure what they got at the moment. While customers are well adjusted to this type of setup, the sellers have different experiences.

Depending on the model and manufacturer, order delays can take in between three to six months, possibly more. Some customers demand products that stores don’t have at the moment because of shortages and delays.

Despite all this, the car selling businesses are forced to learn where the market stands and where it heads for them to catch on adjustments accordingly. The goal of selling is still the same somehow. It’s about making sales and profits for the businesses. However, the way to get to that goal is very different from the way things were before. Companies need to adjust to thrive in the sector.

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