The perfect storm – episode 2

Date: Friday 24 September 2021

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Following on from our widely read article last week on external issues affecting the automotive aftermarket including container costs, raw material prices and driver shortages to name but a few, we look at the latest issues to have arisen this week.

Fuel supply affected
BP and Tesco have closed some petrol stations because they cannot get petrol or diesel supplies to all their forecourts due to a lack of HGV drivers.

The Government has announced up to 50,000 more HGV driving tests will be made available and driving tests will be overhauled, meaning drivers will only need to take 1 test to drive both a rigid and articulated lorry, rather than having to take 2 separate tests (spaced 3 weeks apart).

BP says it has “two thirds of normal forecourt stock levels required for smooth operations” and plans to provide 80pc of normal services to nine in ten forecourts. Motorway services are expected to be prioritised.

Petrol prices are already at an eight-year high.

Running out of chips
The semiconductor chip shortage is now expected to cost the global automotive industry $210 billion in revenue in 2021, according to consulting firm AlixPartners.

“Unfortunately, the chip crisis shows little sign of abating this year, despite what many across the automotive industry had hoped,” commented Nick Parker a partner at AlixPartners. “The perfect storm that we’re seeing of supply chain disruptions, restricted labour markets, and rising shipping costs are only exacerbating the issue further, and new vehicle production is now facing delays that are likely to last well into 2022. With minimal flex left in the industry, there is now more need than ever for manufacturers and suppliers alike to carefully calculate every move and alternative, to back up all decisions with data and research, and to follow through with flawless and decisive execution.”

The chip shortage is expected to last until 2023.

Wholesale gas prices
The government has said it has to "prepare for the worst" as the UK's energy firms continue to come under pressure from soaring gas prices.

Small business minister Paul Scully told the BBC his department was working closely with regulator Ofgem to protect customers if more firms went bust.

Nearly 1.5 million customers have been hit in just two weeks by energy firms collapsing under soaring gas prices.

Among them are Avro Energy and Green, which ceased trading on Wednesday.

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