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Growing lead times take centre stage

Date: 05 April 2011   |   Author:

Vehicle waiting times have reached their worst level for several years, with corporate drivers needing to be flexible in terms of spec, options and even model choice to get hold of some vehicles inside the usual timeframes.

BusinessCar has been contacted by one reader who has been struggling to even get a delivery date for a VW Passat CC ordered in October, and a massive variety of brands including BMW, Nissan and Skoda have been affected as the UK exchange-rate issues and growing demand in markets such as China and America. That means cars can be more profitably sold in other areas of the world, cutting UK supply at a time where some brands have enjoyed a growth in demand here.

Lex Autolease boss Rick Francis described lead times as a "huge issue", and the "most restricted supply we've ever had. Between 2008 and 2010 average lead times have extended from 8-14 weeks", he said. "There is a very clear pecking order in the world economy, the UK guys would love to do more business but they are doing as much as their allocations allow."

David Brennan, boss of leasing firm Leaseplan, said the problem is increasingly widespread. Lead times are longer than they have been in the past five years. "Normally a car, or two or three cars will have longer lead times if they are new or if there is some pent-up demand," he told BusinessCar. "We've now got more brands and more model lines in long lead times than before. Now it can be six to eight months depending on the product, some longer."

Brennan said that flexibility is key in order to obtain vehicles more quickly.

"It can be easier with smaller fleets, if our clients are flexible, and the smaller ones have less formality in their policies, we have an opportunity to help clients into other cars. It's not a case that every brand is sold out of every car line, there is an alternative," he said. "In the SME arena, people would change brand, but bigger companies have more political issues - if so-and-so has a BMW 320d then others at the same level have to have the same."

Audi has been left with some long waiting lists despite increasing production by 10% on its 2009 output. "Sales teams have been proactively contacting fleet customers in particular and reiterating the need to place orders as early as possible to avoid disappointment," said a spokesman.

With waits of three or four months for retail customers ordering Juke or Qashqai models, Nissan has recently launched a courtesy car scheme and said it will also offer the arrangement to fleet customers ordering through a dealer. Skoda has reported particularly strong demand for its Yeti and Octavia - with a wait of up to half a year in the case of the former - although, as is the case with all manufacturers, some engine, gearbox and equipment combinations are significantly worse than others. "We're in a very fortunate position and trying to manage expectation," said a Skoda spokesman. BusinessCar has also had reports of VW suffering in terms of long delivery times, while BMW's new X3 has proven popular enough to have one of the longest waiting lists of all popular brands.

"If you are sold out you're sold out, it's a strong place to be, as long as customers that are waiting are comfortable," said Brennan. "It's not a position they want to be in but if they haven't got any more cars then it's difficult to do more than keep people informed."

Brennan predicted that things will improve in the second half of 2011, and Leaseplan has also begun contacting customers much earlier than before with regard to looking at replacement vehicles.

The other factor is that there's still no indication on how the Japanese earthquake and tsunami will impact upon new car production. Industry commentators were last week speculating that a wide spread of European brands could be affected by a shortage of components from Japanese suppliers. "It is definitely taking longer to get cars than it used to and the Japanese component issue could add more challenges, though that remains to be proven," said Brennan.

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