Long lead times for new vehicles to continue, says Alphabet

Long lead times for new cars and vans is expected to continue into the second part of 2023, says Alphabet in its annual fleet report.

With demand outstripping supply, inflation rising as Bank of England interest rates jump to 3.5%, and the cost of raw materials increasing, the vehicle leasing company says that manufacturer list prices have also been an additional source of uncertainty.

A reduction in manufacturer discounts and regular price increases have presented both businesses and employees with challenges when it comes to budgeting for and planning vehicle requirements. And it stresses, a return to ‘normal’ is not on the horizon just yet.

In its Fleet Report 2022, Alphabet (GB) highlights how leasing companies have been working closely with customers, manufacturers, and retailers to help manage the impact of supply shortages by expanding vehicle choice lists to include more readily available options, leveraging relationships to access to pockets of stock, and crucially, anticipating disruption. 

This has meant planning ahead to get orders in as early as possible - factoring in longer lead times and the need for rental vehicles to help plug any gaps.

Alphabet says it’s essential that fleet managers understand the impact of these market forces, and what can be done to help guide their business and drivers through it in the best way possible.

Caroline Sandall-Mansergh, consultancy and channels development manager at Alphabet GB, said: “Although global supply chain issues, fluctuating costs, and changes in taxation and legislation will continue to challenge and shape mobility, we’re focused on leveraging the opportunities for innovation and added value that this evolving landscape presents to our business and our customers.”

With net zero deadlines on the horizon, low and zero-carbon approaches remain a priority for businesses and huge strides have been made toward fleet electrification as a result.

Alphabet’s new vehicle order figures show that year-to-date plug-in hybrid electric vehicle (PHEV) orders are almost level with petrol vehicles at 31% and 33% respectively, while battery electric vehicle (BEV) orders have increased by 19% this year, totalling 27% of all new orders.

Focus on small and medium fleets

This year, unprecedented uncertainty has placed fleet managers under increased pressure, but this is particularly the case for those in charge of small and medium fleets, says the report.

Businesses with smaller fleets rarely have the benefit of a full-time fleet manager and instead, fleet management is typically part of a much bigger HR, finance or general management role.

As a result, Alphabet says that the time available to dedicate to reviewing and addressing evolving external factors and fleet requirements is often limited and can be a stretch on existing roles within the business.

Next year, with ongoing EV developments and changes to legislation, Alphabet expects to see more full-service offerings from leasing providers being made available to managers of small and medium fleets to support them with navigating the changing fleet landscape and their transition to electric.

For those providers, this will most likely mean a diversified strategy that focuses on the requirements of both SMEs and smaller fleets within larger companies to help businesses access the same expertise and breadth of services currently enjoyed by larger corporates.