The continued disruption in the supply of vehicles to the fleet sector is restricting business growth, according to the latest BVRLA insights. In the latest Business Impact Survey, the vast majority of BVRLA members listed supply issues as their primary concern, while 71% say lack of vehicle availability will negatively impact future performance (1).
Conducted at a time when the automotive supply chain is feeling the combined effects of the semiconductor shortage and war in Ukraine, the latest survey shows that vehicle availability is as bad as it has been since the pandemic, with lead times of up to a year now the norm for all vehicle types.
The knock-on impacts of extended lead times include vehicles being held on fleet longer(2), pushing up maintenance costs, as well as customer expectations not being met(3) as greater compromises are required to keep them mobile.
BVRLA Chief Executive, Gerry Keaney said: “The supply chain challenges that beset our industry show no sign of abating. BVRLA members continue to show remarkable resilience and creative thinking in supporting their customers, but the outlook is a real concern. Lead times are extending, orders are being cancelled and most available vehicles are being channelled to retail customers as manufacturers prioritise profit margins over fleet market share.”
Speaking at the BVRLA’s latest Industry Outlook webinar, where over 300 BVRLA members were given an update on the supply crisis, Dylan Setterfield, Head of Forecast Strategy at cap hpi, said: “There has been a significant distortion in the new car market in recent months. Manufacturers have clearly been prioritising retail over all forms of fleet, and if you look at Q4 last year, retail was only down 1.3%, but over the same period fleet registrations were down 41.3%.”
While the uncertain situation is a widespread concern, the sector does present a variety of solutions that are keeping drivers on the road. Flexible rental options – particularly on vans – have seen significant uplifts in demand(4), with salary sacrifice, Business Contract Hire and used car leasing also growing in popularity(5) as driver perceptions on mobility evolve.
Lee Jones of Fleet Procure, also speaking at the Industry Outlook webinar concluded: “Leasing brokers will always weather these kinds of storms better. This is because we are monthly payment driven and brokers are more agile, quicker to react in the market, and able to deal with all brands and OEMs.”
(1) 94% of respondents listed supply as a primary concern, split across vehicle supply (74%) and supply chain (20%) | 71% agree that lack of vehicle availability is restricting business growth
(2) 74% of participants agree that their vehicle fleet is ageing
(3) 92% of respondents agreed that customers are making compromises on vehicle choice due to lack of model availability.
(4) 68% of respondents said demand for van flexi rental products and services is stronger (47%) or much stronger (21%)
(5) Respondents stating that demand for products and services are either stronger or much stronger: Salary Sacrifice (60%); BCH (55%); Used car leasing (50%)
