Editor's note

Despite the promising news around the falling Covid-19 cases and ever-increasing percentage of fully vaccinated people, the picture in the automotive industry is still one of delay and frustration.

The ongoing chip shortage continues to wreak havoc on manufacturing schedules around the world, with forecasts now predicting the issue will continue well into 2022. Pat Gelsinger, chief executive of Intel, which plans to build new semi-conductor chip factories in Europe and the US by the end of the year, told the BBC that the worst of the crisis is yet to come, stating that “it’s going to be a year – to two years – until we’re back to some reasonable supply-demand balance”.

Unfortunately, chips are not the only supply issue facing the market, with the price of aluminium and steel also sky-rocketing this year (aluminium has seen a 30% rise in price since January, while steel prices have reached record levels).

Add to that the repurposing of strategies to electric-first propositions and it’s clear to see that it is going to be a bumpy ride for manufacturers in the coming months. Those who react quickly to the developing challenges can look to get ahead of rivals during this tumultuous period. Taking into considering strategic leadership and operational capability, research from GlobalData has touted Volkswagen, Toyota and Tesla as the OEMs best placed to overcome the challenges facing the market in 2021.

Turning the focus to the UK, additional challenges are placing further strain on the market. Aside from the obvious Brexit hurdles, the Vehicle Remarketing Association (VRA) recently pointed to a recruitment problem sweeping the automotive sector.

While the ‘pingdemic’ in the UK has meant thousands of workers have had to stay at home, the VRA says it has only highlighted a growing recruitment problem in the market. Where the problem is being acutely felt is the vehicle logistics space, where 100,000 drivers are needed to meet supply needs.

Elsewhere this month, Nissan unveiled its plans for a £1bn EV hub based at its Sunderland plant. The announcement is welcome news for the UK automotive industry, especially the news that an electric gigafactory will be built, increasing the cost-competitiveness of EV batteries in the UK.

The investment represents a step in the right direction, but we’ll need to see considerably more UK investment to support the accelerating switch to EVs and stay competitive with high-volume factories across the English Channel.

Chris Lemmon, editor