SMALL fleets looking to replace vehicles, or wanting to take advantage of the taxation and cost benefits of moving to electric vehicles, maybe stymied by lack of available vehicles to lease.
The current semiconductor – or chip – shortage is becoming a global issue for car and van producers.
The vehicle procurement platform for leasing brokers, Fleet Procure, has told us that all new Transit and Transit Custom deliveries will be 2022 now following temporary idling of the Turkish factory where they are built.
Closer to home, BMW’s Oxford MINI plant is to close for several days as it awaits delivery of the vital chips, in a report from the FT.
Other brands popular with SME fleets likely to be affected include Jaguar Land Rover, Stellantis, Peugeot and Volkswagen.
Denise Lane, Director at the the Association of Fleet Professionals (AFP), representing managers in the fleet industry, said:
“This is an issue that has been rumbling in the background for some time but is now really starting to affect car and van production materially on a day-by-day, week-by-week basis.
“Some manufacturers have already sent out messages to fleets listing which models are likely to be in reduced supply and, for some operators, there are very clearly going to be potential problems with getting hold of the vehicles they need.”
What Should Small Fleets Do?
The first task for most fleets, she said, would be to ask manufacturers and leasing companies about how existing deliveries and future lead times were likely to be affected.
“Job one for fleet managers is to get a clear picture of the situation so that they can formulate a plan. There are a number of options – for example, if a car or van they have ordered will be slow to arrive, they can continue to operate their existing vehicles by negotiating to extend their leasing agreement, or potentially look at alternative models.
“Where vehicles are required to fulfil a new need, then short or medium term hire may be the best option, although it could be that daily rental companies themselves could come under pressure, both in terms of getting hold of planned vehicle supply and meeting increased demand as a consequence of the semiconductor shortage.
“What is most important, we believe, is for manufacturers and others in the manufacturing supply chain to continue to provide updated and accurate information. Fleets should be able to resolve most of the problems created by this situation but clarity is needed so they know exactly what problems they are likely to face.”