Semiconductor shortage: car brands' reactions risk RVs

Carmakers are removing items of specification and delivering vehicles with only one key, to speed up deliveries. This is creating confusion and concern for future residuals plus the added administration to attain missing items/equipment.

This was one of the views expressed by fleet decision-makers at the recent Fleet200 Executive Club meeting (club details below).

Additional discussion points on the semi-conductor shortage were:

• Fleet operators are keen to electrify their fleets but long lead times mean transition targets have to be pushed back
• Company car drivers, especially those with diesels, want electric cars to take advantage of low BIK rates
• Drivers are frustrated as orders for electric and plug-in hybrid cars are delayed, meaning they have to pay higher BIK rates for driving older ICE models
• Supply issues extended beyond just semiconductors – this is a global shortage of raw materials
• Some car makers are promising to retrofit missing features, others are reducing the price of cars to suit revised specification
• Electric vans are the hardest vehicles to get hold of as many manufacturers have stopped accepting orders until backlogs are cleared
• Fleet operators are looking 18 months ahead at cars due for renewal to start the process as early as possible in order to avoid delays
• Leasing providers are largely supportive with contract extensions
• Used market very strong and tempting to offload vehicles for higher prices while demand outstrips supply, but replacement vehicles (short term lease or rental) also difficult to get hold of
• Vehicles are being operated for longer – following lockdown disruption – some are more than two years overdue for replacement and repair costs are climbing.