IF you are waiting for a new lease car to arrive then you have our sympathies.
Leasing companies have some vehicles available – known as stock vehicles – but otherwise new car orders are taking at least 12 months to arrive.
And, unfortunately, this may get worse.
There are a variety of reasons for this. You’ve probably heard that there’s a shortage of semiconductors – the microprocessor chips that enable the correct functioning of everything from your satnav to the suspension system.
But the war in Ukraine is also affecting vehicle production because this is where many of the wiring looms are produced. See Car supplies worsen as Ukraine crisis shutters German plants, which explains what’s occurring there.
Cox Automotive, the world’s largest automotive service organisation, says that it now expects a new car forecast of just 1.65m vehicles.
It is looking increasingly likely that the pre-pandemic automotive market we all knew may never return as the sector continues to be hit by headwinds
Philip goes onto say that even without the Ukraine crisis, Cox Automotive would have been looking to revise its forecasts. At the same time, despite there being anecdotal reports that manufacturers had begun to fulfil orders from a supply-starved leasing sector and even reports of tactical registrations, supply simply has not picked up in the volumes anticipated.
We began the year with the hope that the UK’s new car supply constraints would endure a smooth and progressive recovery throughout the year as semiconductor and raw material supplies steadily returned. However, these hopes were dashed, with the conflict in Ukraine impacting the automotive supply chain and the entire logistics and distribution network.
Supply headaches also persist from the long-awaited fulfilment of orders made 12 or even 18 months ago. However, there are also reports of this year’s order books already being full, so it’s clear the backlog of orders will only grow, and new orders won’t turn into actual registrations until at least H2 2022 or even into 2023.
What’s more, Philip says that many of the cars eventually rolling off the production line are missing specifications such as touch screens, heated seats, and sat nav devices. While these maybe short-term solutions many manufacturers are needing to implement in order to overcome the ongoing semiconductor shortage, it means many SME fleet drivers are often compromised on what options they initially wanted to order on a vehicle.
More than anything else, it means SME fleets must plan new car replacements carefully and take advice from their leasing supplier. It may also mean contract extension of existing cars until production eventually eases.
But waiting for that new lease car is only going to get longer. And you have our sympathies on that.