Numerous car dealerships in the country are seen recently advertising their brand new available cars, causing confusion among interested consumers who were impacted by significant delays in car deliveries just a few weeks ago.

However, “this does not mean that supply chain challenges have ended”, Alexis Anninos, president of the Motor Vehicles Importers Association, explained. Mr. Anninos stated in Brief that “no one can claim that the issues that were sparked due to the raw materials shortage have been resolved”. Perhaps, as Mr. Anninos adds, some distributors may have car inventory at the moment, but neither delays nor the supply chain problems caused by the war in Ukraine have been overcome.

As noted by the president of the Association of the Motor Vehicles Importers, the automotive industry cannot predict when the new cars’ production pace will be stabilized. At the same time, he emphasized that the delays that have arisen and continue to arise affect not only buyers, but also the Cypriot car dealerships, which depend on deliveries from the automobile manufacturers that are deeply affected by global crises.

In regard to the observed price increases in vehicles that had already been ordered, Mr. Anninos said that the dealerships are simply following the updates they get from the car manufacturers.

As he explained, there are manufacturers that inform about possible price changes in advance and on the other hand, there are others that inform that prices are increasing suddenly, even if a car order had already been placed. Thus, as he concluded, the price increase in cars that have been ordered by that time, is not a decision made by the dealerships in Cyprus, but by the car manufacturers abroad.

The global semiconductor shortage, first reported in late 2020, has significantly impacted the automotive supply chain, contributing to more than 10 million units of lost global vehicle production, according to IHS Markit. The shortage has been compounded by additional disruptions, such as severe weather and flooding, surging commodity prices and global repercussions from the war in Ukraine.

The impact of these disruptions on the automotive industry is becoming increasingly difficult to quantify, with automakers redesigning chips for substitution and paying premiums in some cases to expedite delivery.

Automakers and suppliers are working together to address these critical issues, but the issue of price relief from surging commodities is becoming increasingly pressing. Price relief for suppliers appears uneven, benefiting suppliers with size and scale or leverage via advanced technology. Given that, a more comprehensive approach to price relief may be required.