Debbie Wallace's blog: Keeping fleets fit for purpose even when the chips are down
21 June 2021
Europcar Mobility Group UK's head of SME looks at the options fleet managers have when dealing with increased vehicle demand from businesses at a time of manufacturer shortages.
The car industry certainly has had a lot to deal with in the last 18 months or so - first the shift in economic landscape because of Brexit, and then the pandemic which forced many manufacturers to temporarily close production lines. Add to this severe weather events and the blocking of the Suez Canal, and you have a 'perfect storm' which has led to an acute shortage of semi-conductor chips and subsequently much longer lead times on the delivery of new cars. It has also resulted in rising prices for used vehicles, particularly light commercial vehicles as increased workload for many businesses has translated into additional vehicle requirements.
With reports that the semi-conductor chip shortage is likely to impact the sector for the rest of the year and possibly into 2022, businesses who rely on their vehicle fleets may need to take a different and more flexible approach to keeping their fleets 'fit for purpose' in the months ahead.
Where an average waiting time was 3 months, new vehicle lead times are now commonly 6 to 9 months. Many vehicle manufacturers are also only offering a reduced range of models and in some instances with changes to their specifications and features. So, what can fleet managers do to ensure their businesses still have access to safe, appropriate and reliable vehicles?
Keeping your owned vehicles beyond their normal lifespan can mean higher service and maintenance costs and for leased vehicles extending the contract can also prove costly. Plans for a greener electrified fleet may also have to be put on hold, as usual replacement cycles fall by the wayside.
For those with a large 'grey-fleet' there are the obvious safety issues too, as employees unable to upgrade their cars due to lack of availability and rising prices in the second-hand market continue to drive older cars.
Long- term rental could be a cost effective and agile option which could help to bridge the supply gap and manage the uptick in workloads.
As a well-known quote says "Uncertainty is the only certainty there is", but having a strong partner who can work with you to provide long-term rental vehicles as and when they are needed helps to take some of that uncertainty away, and all without placing any unnecessary burden on the balance sheet.