Fleet News

Global semiconductor shortage warning for fleets

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An emerging shortage of semiconductors risks disrupting global car and van production, fleets are being warned by the Association of Fleet Professionals (AFP).

The fleet training and trade body says that fleet decision-makers may need to adopt strategies to cope with longer lead times for vehicles if the disruption continues.

The global semiconductor shortage, caused by a surge in demand during the pandemic for consumer electronics and a recent fire in a key supplier in Japan, is impacting on the ability of all automotive manufacturers to produce vehicles equipped with certain components, according to The Procurement Partnership.

Lead times for new vehicles have been increased and now stand at up to 12 months for certain factory-order models.

The AFP says that a range of models popular on fleets are likely to be affected with manufacturers including Ford, Jaguar Land Rover, Stellantis and Volkswagen either announcing temporary factory closures or stating that vehicle deliveries will be delayed.

AFP director Denise Lane, director at the AFP, says that the shortage of semiconductors has been “rumbling in the background for some time” but is now starting to affect car and van production.

“Some manufacturers have already sent out messages to fleets listing which models are likely to be in reduced supply and, for some operators, there are very clearly going to be potential problems with getting hold of the vehicles they need,” she added.

The first task for most fleets, according to Lane, would be to ask manufacturers and leasing companies about how existing deliveries and future lead times were likely to be affected.

“Job one for fleet managers is to get a clear picture of the situation so that they can formulate a plan,” she said.

“There are a number of options – for example, if a car or van they have ordered will be slow to arrive, they can continue to operate their existing vehicles for longer or potentially look at alternative models.

“Where vehicles are required to fulfil a new need, then short or medium term hire may be the best option, although it could be that daily rental companies themselves could come under pressure, both in terms of getting hold of planned vehicle supply and meeting increased demand as a consequence of the semiconductor shortage.”

The AFP is calling on manufacturers and others in the manufacturing supply chain to continue to provide updated and accurate information.

“Fleets should be able to resolve most of the problems created by this situation, but clarity is needed so they know exactly what problems they are likely to face,” said Lane.

The warning from the AFP comes as Aston Barclay says that prices for used vans are expected to rise in the coming weeks as new vehicle supply is affected by the global semiconductor crisis.

Ford was the latest manufacturer to announce plant shutdowns, with its Transit factory in Turkey closed until June 13.

The remarketing firm says the lack of new vehicles will fuel the continued challenge that the market faces of demand outpacing supply of used vans which is forcing prices up to record levels.

Magna Accident Services is also warning that the van insurance market faces significant problems finding replacement vehicles, which could increase costs. 

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