Fleets facing more severe new car supply issues than retail buyers
08 June 2021
Author: Sean Keywood
Ongoing new car supply issues mean particular problems for the fleet market, it has been said.
The Vehicle Remarketing Association (VRA) has published its latest 'five minute briefing' document on its website, on the subject of used vehicle supply for the rest of 2021.
Among the experts quoted is MJB Automotive Solutions director Marcus Blakemore, who emphasised that fleets in particular were facing problems from widely-reported new car delivery delays.
He said: "The supply situation does look quite grim, especially in the fleet sector.
"Manufacturers are continuing to focus on retail channels and there will be limited car supply into fleets with short-term rental especially being affected, possibility continuing into 2022."
Blakemore added that supply issues would be caused not only by the global semiconductor shortage affecting car production, but also by the need for manufacturers to meet environmental regulations.
He said: "CAFE regulations may also force manufacturers to sit on new petrol and diesel vehicles in Q4 of this year, delaying deliveries still further.
"All of this has a direct knock-on into the used sector, with reduced numbers of vehicles being recycled by fleets into the market."
Among the other experts quoted is Rupert Pontin, VRA deputy chair and director of insight at Cazana, who agreed new car supply shortages would have knock-on effects for the used market, with delays in company car fleet renewal one area of concern.
He said: "The second half of 2021 will see some potential used car supply challenges driven mainly by shortages of new cars. If this happens, it will mean there will be restricted supply of late plate used stock that would normally have come from manufacturer employee car schemes and demonstrator programmes.
"This may not affect all manufacturers but it will, without doubt, be a disrupting factor for some and therefore the market as a whole.
"The lack of new cars will also affect the fleet market which may struggle to replace company cars, therefore altering the flow of three to four-year-old ex-contract hire and lease vehicles into the market. As such, those cars that do come back may have a higher mileage and be in poorer condition than expected."