News analysis
A mixed outlook
New car shortages may be easing, but other problems are now rearing their heads for the fleet sector. Sean Keywood reports.
S
ubsiding vehicle supply challenges facing the fleet sector have been replaced by concerns over spare part shortages and SMR costs and delays, according to research by the BVRLA.
The rental and leasing industry body has released new data from its half-year Industry Outlook Survey, which forms part of the research process that will eventually culminate in the organisation’s annual Industry Outlook Report, published at the end of the year.
The survey has revealed that, on the subject of vehicle supply, 59% of respondents (122 leasing and rental industry leaders were surveyed) saw better sales transactions in the first quarter of this year than in the same time period 12 months earlier, which the BVRLA
said provided a feeling of cautious optimism in the face of the ongoing cost of living crisis.
The organisation said fewer members were reporting that vehicle supply was an ‘extreme barrier’ to business when compared to August 2022, with deliveries for ICE, hybrid, and electric cars all improving, and lead times of ten months or more no longer the norm.
The survey found 28% of respondents currently thought ICE car supply was an extreme barrier, compared with 64% last year, with the respective figures 30% and 59% for plug-in hybrids, and 23% and 53% for EVs.
However, the survey also found that 90% of respondents had seen a decline in parts availability, leading to vehicle off-road times and prices increasing, with
92% of those surveyed seeing a rise in downtime, 92% seeing an increase in parts costs, and 94% seeing an increase in labour costs.
This situation is also being exacerbated by a generally older fleet requiring more maintenance, with 89% of those surveyed saying the average age of their fleet is older than it was in 2019 – by more than 12 months in the case of 36% of respondents.
Other survey findings include that 58% of respondents expect the size of their fleet to increase in the next six months, 60% are seeing strengthening demand for daily rental vehicles, and 66% are seeing increasing demand for salary sacrifice. In addition, 29% of respondents expect the economy to improve over the next six months, while 21% expect it to deteriorate.
Commenting alongside the release of the survey results, BVRLA chief executive Gerry Keaney said: “For the fleet and mobility services sector, there really is no such thing as ‘business as usual’ anymore.
“Hampered by Brexit, Covid, cost- inflation and carbon reduction targets, the global automotive supply chain continues to lurch from one crisis to another, with BVRLA members bearing the brunt. “The sentiments shared in our latest report highlight this, but they also tell a story of optimism and remarkable resilience. Green shoots are appearing with vehicle supply and most of our members are seeing growing sales. “We are not out of the woods, but we have every reason to believe that businesses in our sector are on the right path.”
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theAA.com/business 8 | August 2023 |
www.businesscar.co.uk
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