There has been a perfect storm brewing in the automotive industry over the past few years. First there was Covid-19, which shut vehicle and parts producer’s global manufacturing facilities. Then came the semi-conductor shortage – a deficit of the materials needed to make the many microchips fitted to all new cars.
After that there was a shortage of various raw materials as well as transportation to get components from one place to another, which is being exacerbated by continuing tensions in Eastern Europe.
If you’ve gone into a car dealership recently and tried to buy yourself a new car, you have probably experienced the effects of these shortages. Delivery times for new vehicles have gone from a matter of weeks pre-pandemic to many months today.
As a vehicle converter, we experience these shortages in a very similar way to car dealerships or even consumers. Where we have traditionally had an ample supply of vehicles, deliveries of base vehicles for conversion are now hard-fought victories.
We’re not alone in this. Of all vehicle converters in the UK, only those that build for the NHS are given priority vehicles. The fact that we are able to continue receiving vehicles at all is a testament to the long and prosperous relationship we have with manufacturers like Mercedes-Benz. I fear that many funeral vehicle convertors will not be so lucky.
However, the issues do not end there. To explain this next part, I feel that it’s important to be as transparent with you as possible and to give you an understanding of how we operate commercially.
Our relationship with vehicle manufacturers like Mercedes-Benz is quite a simple one. We buy our vehicles in high volumes and, for committing a big order that helps to fill their books and keep their factories busy, the manufacturer gives us a significant discount. This discount is then passed on to our customers in the list price of our limousine or hearse.
However, today manufacturers’ order books are already full and the factories are producing as many vehicles as they can. The manufacturers can’t offer us these discounts, and so the cost of the vehicles we’re buying has gone up.
We have looked at this in every way we possibly can, and I’m afraid to say that we are going to have to follow suit.
From 10th March 2022 the list price of our new Mercedes-Benz vehicles will be increasing by up to 12% depending on the specification. While this is not the extent of the cost increases we are facing, we believe that this will allow us to continue producing vehicles to the standard our customers expect for the long-term.
While I appreciate that things are tough for many people and businesses at the moment, I hope you understand why it is we need to take this decision.
There are also some positives to bear in mind. Firstly, unlike many funeral vehicle converters we have a guaranteed supply of Mercedes-Benz base vehicles. As such, our order book remains open and the quality of our products, engineering and services remains unchanged.
We’ve also committed to a price freeze on any new or used vehicles we currently have in stock to help businesses that are in most urgent need.
Finally, I would urge any of you with questions or concerns about this news to talk to me or a member of my team and, as always, we will do all we can to help.