“These delays are massive,” Andreas Braun, regional director of marine products for Europe, Middle East and Africa for Crane Worldwide Logistics, told CNBC. This problem could delay the delivery of cars to the US “on a months-schedule”.
BMW among the hardest hits
BMW, says Brown, is among the automakers worst hit. “There is a three-month delay for BMW, as cars are sitting in parking lots to be supplied with extras, especially with the iDrive touch control unit.”
The stalemate is so severe that huge cargo ships that float cars between continents for sale are beginning to make other plans. Wallenius Wilhelmsen Shipping Line is one of the largest car carrier operators.
Dan Nash, head of vehicle carriers for VesselsValue, told CNBC that the line told automakers it couldn’t ship any cars in November and probably not in December because of Bremerhaven’s backup.
Several factors collide to create a traffic jam. Military exercises took up part of the port’s energy. The lack of drivers to move containers to and from the port has caused a backlog.
Shipping companies canceled some ships at the start of the COVID-19 pandemic as global trade slowed. They ordered replacements to rebuild their fleets, but no one builds huge ships quickly. Nash told CNBC that the fleet may not return to normal until 2024.
Many dealers are already low on cars for sale
Many automakers are already under-selling cars. A global shortage of microchips and other supply chain crises have caused them to build fewer cars than Americans are willing to buy.
Before the COVID-19 pandemic, most automakers attempted to maintain at least a six-week supply of new cars to sell. Thanks to supply chain challenges, most of them are now below that number.
At the end of October, BMW dealers had 15 days’ worth of cars in stock. Audi dealers had 22. Mercedes-Benz dealers had 25.
Not all European automakers were severely affected. Volvo ended October with a 44-day supply of cars in the US, with Alfa Romeo dealers getting the industry’s largest supply in 98 days.
Dealers with a healthy supply of cars to sell often discount them. Dealers who can count on selling all the cars that enter their doors quickly don’t need their discount.
The wide spread of the current offer has led to strange conditions for shoppers, who can find deep discounts on some sales groups and absolutely nothing on others.
But the delay in shipping is likely to be bad news for BMW shoppers – the brand gets more looks from shoppers than any other luxury brand. Higher demand and lower supply means higher prices.
We reached out to several European automakers to ask if they could share any information about what car shoppers should expect.