A 38-year-old securities firm employee, identified only by his surname Kim, recently had to sign an unscheduled rental car contract. This is because BMW’s cooling system, which it usually drove, broke down and left it at the repair shop, but was notified that “the parts from overseas were cut off and we had to wait two weeks.” He said, “I took a bus to go to work, but I had to rent a rental car because I had a golf appointment on weekends.”
Automobile repair shops are frequently experiencing inconvenience to vehicle drivers because they are not supplied with parts on time. This is because the supply and demand of repair parts are being disrupted due to Russia’s invasion of Ukraine following the logistics crisis caused by COVID-19.
Car repair parts out of stock, prices rise
Maintenance could not be completed because there was no gear lever. A 51-year-old car mechanic is provided.
Maintenance could not be completed because there was no gear lever. A 51-year-old car mechanic is provided.
Lee (51), a mechanic who met at an industrial complex in Seongdong-gu, Seoul on the 8th, said, “We just sent a customer back yesterday because there was no promise when the gear lever parts of Land Rover’s vehicle would come in.” It is known that a number of parts companies, including Leoni, a car cable parts company in Ukraine, Mercedes Benz, and Audi, which supply handles and gear levers, are causing disruptions in their operations. A quarter of Ukraine’s exports to Germany are auto parts.
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The situation in the domestic car maintenance industry is similar. Due to the rapid exhaustion of stock, such as engine wiring of some models of Hyundai and Kia Motors and blower motors, which are attached to the air conditioner of GM Korea’s passenger car Tosca, repairs have often been delayed. It is explained that inventories of Chinese parts are starting to run out recently. This is due to the Chinese government’s blockade of some cities as part of its COVID-19 quarantine measures. The maintenance industry says it is having a hard time finding wire parts for large and commercial vehicles such as dump trucks and container vehicles.
BMW 320d maintenance could not be completed because there was no heater hose. A 51-year-old car mechanic is provided.
BMW 320d maintenance could not be completed because there was no heater hose. A 51-year-old car mechanic is provided.
Parts that contain semiconductors, such as automobile sensors, control and driving devices, and remote control of new vehicles, are more difficult to obtain. Lee (40), an official at an automobile industry in Yeongdeungpo-gu, explained, “Some electronic parts of the new domestic car model take two to three months to come in.” He added, “If the maintenance is prolonged, the rotation rate will fall, which will directly affect sales.”
Prices of parts have also increased significantly. Lee, CEO of a parts distribution company located in Yangju, Gyeonggi Province, said, “About 30 manufacturers have raised prices of parts such as oil filters and air cleaners by 15 to 25% this year, as well as metal exterior parts such as fenders and fillers.”
The rental car, “Hwa-Gwa… an anxious casualty insurer
The rental car industry, which has increased its customers due to the reflective effect of the shortage of parts, seems to be “managing facial expressions.” Since the COVID-19 pandemic, rental car companies have seen their sales grow sharply thanks to an increase in domestic travel and an increase in demand for rental cars during the waiting period for new cars to be released for up to 16 months.
On the other hand, non-life insurance industries are watching the shortage of parts with anxious eyes. Non-life insurers, which suffered losses with a loss rate of up to 90% between 2018 and 2020, benefited from reduced vehicle operation after the COVID-19 incident. Recently, insurance premiums for personal vehicles have been cut by 1.2 to 1.4%. However, concerns are growing that the loss rate could rise sharply due to rising vehicle maintenance and rental car costs ahead of the full easing of social distancing. A non-life insurance company said that the rental car loan period has increased by one day from 4.8 days in the previous month to 5.9 days. An official from Hyundai Marine & Marine Insurance said, “The number of accidents itself has decreased, so the parts shortage does not seem to hurt management yet,” adding, “The situation may change if we enter the peak season of seasonal car operation and work from home.”
