Volvo benefit from long lead times and delivery delays as fleet operators lose patience
In the past couple of months Volvo has been added to choice lists of a number of large fleets through a combination of availability and a strong product range. One household name, an 850-strong fleet had been running a choice list comprising of three German car brands, but Volvo has replaced one of these based on shorter lead times – normally just six to eight weeks from either its Swedish or Belgian plants.
For some fleets manufacturer lead times have reached critical levels according to Volvo with some holding a full scale review of their car fleet policies to ensure employees are kept mobile and are not faced with hefty car hire charges, costly contract extensions or expensive assets depreciating rapidly.
Long lead times are also becoming a major human resources challenge for the company car benefit hierarchy in that prices can rise during the six to seven month lead time period so a car can move up a band on the company car choice list.
Selwyn Cooper, national corporate operations manager at Volvo, explained: ‘The days of manufacturers holding lots of unsold stock are gone, but the industry should be mindful of the impact long delivery delays are having on the overall UK car market.
‘UK fleets are definitely suffering because cars are being supplied to countries like China where there is demand and high levels of profitability, compared with the UK where the currency strength against the Euro and Dollar is constantly squeezing manufacturer profitability. By limiting supply in a market a manufacturer can also start to control and improve used values,’ he added.