Automakers Face Another Challenge to Increase Car Supply
Oct 14, 2021 · 3 min read
There have been a number of natural disasters in 2021, which had terrible impacts on people's lives and businesses. Flash flooding in Arizona devastated Flagstaff, a popular town for tourists. The 5.2 inches of rainwater will cost the state about $2.6 million to repair the damage.
It’s been challenging for countries trying to recover from the pandemic. Virus variants continue to spread, and while vaccines are being steadily distributed in larger nations, some countries have limited or no access to vaccines.
COVID-19 outbreaks and extreme weather continue to disrupt car supply and prevent automakers from delivering vehicles.
The impact of natural disasters and extreme weather
A wave of natural disasters has harmed many lives and destroyed homes. According to CNN, a flood in China hit Zhengzhou the hardest, a city of 12 million people. Currently, 50 people have gone missing and over 200 people have died. Over 500 people were evacuated from a flooded subway line.
Deadly floods in both China and Germany have had a major effect on the supply chain. In Germany, road transportation has slowed down, and late shipments have increased by 15%, according to Autoblog.
These slowdowns are likely to continue into the next year. Some companies have estimated that these issues won't be resolved until March, at least in Asia.
Another obstacle for automakers trying to improve supply
Extreme weather has been yet another challenge that prevents automakers from improving car supply. This, along with other obstacles brought on by the pandemic, has made it hard for China and other countries to revive their economies.
The Delta variant is especially devastating in Asia. It has led to land access being cut off from sailors, leading to exhausted crew members and some ships being stranded. Ships currently transport about 90% of trade around the world.
This is a heavy blow to vehicle manufacturers. The shortage of parts has already caused many automakers to shut down factories. In the U.K., a lot of workers had to self-isolate to curb the spread of the virus.
Other companies have had to strip features from their vehicles to meet demand. According to CNBC News, "Nissan is reportedly leaving navigation systems out of cars that would normally have them, while Ram Trucks has stopped equipping its 1500 pickups with a standard 'intelligent' rearview mirror that monitors for blind spots."
Worldwide ports experiencing jams
Worldwide ports are also experiencing unprecedented congestion. Union Pacific, which manages freight railways in the U.S., suspended all cargo shipments for seven days in Chicago. This will force some companies to use sea transport instead, which is already an overloaded system.
South Africa recently suffered a major hacking incident that impacted its ports in major cities such as Cape Town. Not only is car supply continuing to face challenges, but supermarkets might not have a healthy inventory, and some gas stations are closing.
The global supply chain is being driven towards a breaking point. Consumers are urged not to panic-buy while countries work to manage disruptions.
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