Paul Hollick, chair, Association of Fleet Professionals, on the car production issues hitting fleets and some solutions.

Paul Hollick, chair, Association of Fleet Professionals

The ongoing perfect storm of problems has left fleets wondering when the car production issues will end.

New car supply has been a major issue for fleets ever since the onset of the pandemic. Production has been affected by everything from material shortages to the semiconductor crisis to component production in Ukraine.

Worryingly, the situation may be worsening. Feedback from AFP members shows supply issues are persisting – at best, supply is patchy and at worst, it’s non-existent.

This situation is, of course, a worldwide problem caused by worldwide issues. However, it is also one that is causing increasing operational disruption for businesses in the UK. Some fleet managers are telling us that drivers are having to go through the process of choosing a new car half a dozen times before finding one for which a manufacturer will even provide a production slot – and that date is likely to be a year or more away. It’s also a common occurrence to see repeat cancellations once orders have been accepted.

Other manufacturers have closed their order books either completely or for certain models. In general terms, PHEVs have become very difficult to acquire as production is seemingly being skewed away from them towards EVs, probably because of CAFE regulations.

Even when cars can be obtained, they are often being delivered without meeting the order specification. The wrong colour is fairly commonplace, but equipment is often missing – parking sensors seem to be a particular issue – with no resulting adjustment in price. These issues exist for petrol and diesel cars but can generally be doubled for EVs.

What should fleets do in these situations? Essentially, they have little choice but to continue operating their existing cars for as long as possible but with new car shortages now in their second or even third year, there is increasing pressure on managers.

The shortage situation creates two sets of problems. The first is that company cars are generally becoming older and difficulties with keeping them on the road in a cost-effective manner increase over time. Some are now being operated into their fifth year and will probably still be on the fleet in their sixth because they cannot be replaced. These are largely unchartered waters in maintenance terms.

The second is an employee satisfaction issue. Drivers who are keen to move into EVs but simply cannot get hold of the right model are having to continue to pay benefit in kind on ageing and increasingly unattractive diesel models, with no solution in sight. It’s costing them quite a lot of money. There is no easy answer to this situation and it does cause some disruption.

One trend we have seen that can sometimes help is that AFP members have become adept at swapping information about new car availability. One of the key advantages of being part of the AFP is the ability to network extensively with fellow professionals and there is certainly much conversation taking place at the moment about when and where vehicles are becoming available. This is not a solution in itself but does mean that you can keep track of the latest market situation.

Ultimately, it is very difficult to know when the underlying supply issues that are making new cars so difficult to obtain will start to noticeably improve. However, with the size of the order backlog, we don’t expect to see any real change for at least a year or probably longer. This is a problem that is not going away any time soon.