News analysis
Risk of turbulence
Fleets face continued rental and leasing cost uncertainty, the AFP’s Annual Conference has heard. Sean Keywood was in attendance.
F 4 | June 2023 |
www.businesscar.co.uk
luctuations in costs facing fleets for rental and leasing are likely to continue for at least a year, it has been said.
The topic was one of those discussed at the Association of Fleet Professionals’ (AFP) Annual Conference, held at the British Motor Museum.
During a discussion on dealing with rental and leasing costs, AFP board member and National Grid head of fleet Lorna McAtear said the market had been disrupted by factors including price reductions implemented by Tesla, and the arrival of more Chinese manufacturers in the UK.
Left: Lorna McAtear of National Grid, spoke of a ‘bumpy ride’ for at least anther year.
She said: “I think we’ve probably still got another year at least of a bumpy ride when it comes to leasing costs and residual values, because we don’t quite know what these Chinese manufacturers are doing with their price.
“They are coming in cheaper, which is great – upfront costs are brilliant. What that means is you’ve got some vehicles in the second-hand market that are still expensive with older tech, so actually somebody somewhere is going to end up taking a bit of a loss on those vehicles. “Don’t necessarily expect your leasing costs to come down immediately that you start to see these vehicles coming into the marketplace.”
Also speaking on the panel, fleet management consultant Steve Winter said there could be cost increases to come
for both rented and leased vehicles. He said: “Manufacturers are deciding they don’t need to offer massive discounts – they can sell every product they have, at quite a significant margin for them, therefore rental companies are having to pay those margins as well. “Who knows what will happen to RVs as we approach 2030 – RVs for diesel vehicles could actually increase more, as some fleets can’t make that transition by 2030, perhaps, and they might hold onto some diesel vehicles for a bit longer. So, it’s a really bumpy ride.”
Among the other subjects discussed at the conference was continuing supply problems and long lead times for new vehicles, with Galliford Try Plant assistant fleet manager Emma Evans saying this was a particular issue with her car fleet.
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