Increased vehicle supplies are now filling more fleet orders; however, the rosy picture is marred by a lack of parts and rising service maintenance and repair (SMR) costs and delays, according to newly released industry survey results published by British Vehicle Rental and Leasing Association (BVRLA).

The steady improvement to vehicle supply levels is helping to meet the growing demand reported by many BVRLA members. Nearly 60% the association’s survey respondents experienced 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,” according to BVRLA.

Aftermarket Aggravation

A decline in parts availability — cited by 90% of respondents — is leading to rising prices and off-road times. Slightly more than 90% of respondents reported an increase in vehicle downtime, compounded by an upsurge in labor costs (reported by 94% of respondents) and an aging 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.

While sharing dampening details of remaining challenges, the survey report also tells “a story of optimism and remarkable resilience,” said Keaney. “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.”

Fewer Cite Supply as ‘Extreme Barrier’

Compared to August 2022, fewer BVRLA members report that vehicle supply is an “extreme barrier” to business. Lead times of 10 months or more for cars are no longer the norm, and deliveries are improving for electric, hybrid and ICE vehicles.

The picture for vans also is brighting. Although more than half of orders still take more than 10 months to reach their destination, 54% of ICE vans are being delivered 10-plus months after initial order, down from 68% in August 2022, with a similar situation for electric vans (51% 10-plus months vs 61% in August 2022).

Selected data from Industry Outlook Survey, July 2023

(Sample base: 122 leasing and rental industry leaders)

ECONOMIC LANDSCAPE

• 29% of respondents expect the economy to improve over the next six months. 21% expect it to deteriorate.

• 51% have seen staffing levels increase in the last 12 months, although 56% are struggling to recruit new staff.

• Since January 2023, 25% have seen an increase in the number of customers contracting them because they are having payment difficulties.

• 36% say that the average age of their fleet is now more than 12 months older than in was in 2019. 89% advise their fleet is older than seen in 2019.

DEMAND

• 58% expect to grow their fleet size in the next six months.

• 59% saw better sales transactions in Q1 2023, vs Q1 2022.

• 29% of respondents are seeing stronger demand for PCH.

• 60% are seeing stronger demand for daily car rental.

• 66% are seeing stronger demand for salary sacrifice.

SUPPLY

• Car supply becoming less of a barrier. ‘Extreme barrier’ down.

  • to 23% vs 53% in Aug 2022 [BEV]

  • To 30% from 59% in Aug 2022 [PHEV]

  • To 28% from 64% in Aug 2022 [ICE]

• Van supply also improving, but to lesser extent. ‘Extreme barrier’ down

  • To 31% from 50% for BEV

  • To 31% from 50% for PHEV

  • To 49% from 66% for ICE

SMR

• 92% of respondents reported an increase in vehicle downtime (61%: “Large increase”).

• 92% reported an increase in cost of parts (52%: “Large increase”).

• 94% reported an increase in cost of labor rates (47%: “Large increase”).