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Fleets face vehicle supply concerns as manufacturers prioritise retail, BVRLA warns

Date: 05 April 2022   |   Author: Sean Keywood

Continued disruption in the supply of vehicles to the fleet sector is restricting business growth, with manufacturers prioritising retail sales, according to the BVRLA.

The rental and leasing industry organisation's latest Business Impact Survey found that the vast majority of its members listed vehicle supply as their primary concern, while 71% said lack of availability would negatively affect future performance.

The survey found that the combination of the global semiconductor shortage and the war in Ukraine meant that vehicle availability was now as bad as it had been since the Covid-19 pandemic started, with lead times of up to a year now the norm for all vehicle types.

The knock-on effects of this include vehicles being kept on fleet for longer, pushing up maintenance costs.

BVRLA chief executive Gerry Keaney said: "The supply chain challenges that beset our industry show no sign of abating. BVRLA members continue to show remarkable resilience and creative thinking in supporting their customers, but the outlook is a real concern.

"Lead times are extending, orders are being cancelled and most available vehicles are being channelled to retail customers as manufacturers prioritise profit margins over fleet market share."

Speaking on a BVRLA webinar, Cap HPI head of forecast strategy Dylan Setterfield said: "There has been a significant distortion in the new car market in recent months. Manufacturers have clearly been prioritising retail over all forms of fleet, and if you look at Q4 last year, retail was only down 1.3%, but over the same period fleet registrations were down 41.3%."