The long-running vehicle supply challenges that have been suffocating the fleet sector are beginning to subside, according to new data from the BVRLA’s half-year Industry Outlook Survey. Unfortunately, the respite this provides is being compromised by a lack of parts and increasing SMR (service maintenance and repair) costs and delays.
The steady improvement to vehicle supply levels is seeing more fleet orders being fulfilled, helping to meet the growing demand being reported by many BVRLA members. 59% of respondents saw better sales transactions in Q1 2023 vs Q1 2022, providing a feeling of cautious optimism in the face of the ongoing cost of living crisis.
But this confidence is being curtailed by an array of aftermarket aggravation. A decline in parts availability – cited by 90% of respondents – is leading to prices and off-road times increasing. 92% of respondents reported an increase in vehicle downtime, compounded by an upsurge in labour costs (reported by 94% of respondents) and an ageing fleet requiring more maintenance.
“For the fleet and mobility services sector, there really is no such thing as ‘business as usual’ anymore,” said BVRLA Chief Executive, Gerry Keaney.
Hampered by Brexit, COVID, cost-inflation and carbon reduction targets, the global automotive supply chain continues to lurch from one crisis to another, with BVRLA members bearing the brunt.
The sentiments shared in our latest report highlight this, but they also tell a story of optimism and remarkable resilience. Green shoots are appearing with vehicle supply and most of our members are seeing growing sales. We are not out of the woods, but we have every reason to believe that businesses in our sector are on the right path.”
For cars and, to a lesser extent, vans, fewer members are reporting that vehicle supply is an ‘extreme barrier’ to business when compared to August 2022. For cars, lead times of 10 months or more are no longer the norm, with deliveries improving on electric, hybrid and ICE vehicles.
The picture for vans has also improved, although more than half of orders are still taking over 10 months to reach their destination. 54% of ICE vans are being delivered 10+ months after initial order, down from 68% in August 2022, with a similar situation for electric vans (51% 10+ months vs 61% in August 2022).
The BVRLA’s Industry Outlook survey runs twice a year, culminating in the Industry Outlook Report that will be launched in December at the association’s flagship Conference of the same name. More information and the full report from December 2022 can be found at: Industry Outlook Report