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Upcoming emissions regulations add to supply woes

OEMs struggling to hit CAFE requirements could have a knock-on effect for fleets according to Rivervale Leasing which, like many Leasing Broker Federation members, is experiencing vehicle supply problems. Leasing Broker News last week reported that shortages of semi-conductors leading to  vehicle to production delays and the ‘de-contenting’ of electronic equipment, as well as logistics issues, are leaving brokers short of cars and with unhappy customers.
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October 7, 2021

AS well as semiconductor shortages and logistics issues, vehicle manufacturers are also struggling to meet CAFÉ regulation expectations for blended CO2 emissions due to come into force from next year.

This will have a knock-on effect for fleets according to Rivervale Leasing which, like many Leasing Broker Federation members, is experiencing vehicle supply problems.

Leasing Broker News last week reported that shortages of semi-conductors leading to  vehicle to production delays and the ‘de-contenting’ of electronic equipment, as well as logistics issues, are leaving brokers short of cars and with unhappy customers.

Brokers said they are experiencing supply and lead-time issues although it does vary from OEM to OEM. One broker reported that a prestige brand recently cancelled up to 100 orders due to be built this year and decided to close 2021/22 model year production on two models altogether.

They will re-start with the next model year production but customers would have to re-order at new pricing levels and suffer renewed lead times. Other manufacturers are “de-contenting” models due to shortages of microprocessors. Some also appear to have logistics issues.

Bud Johnston, Group Marketing Manager at Rivervale, said: “Most of the issues we are experiencing are around supply – general availability across all manufacturers is not what we are used to and the lead times are longer than we have ever experienced.

“This extends to orders made many months ago which is very frustrating for us and customers and has also lead to issues with current vehicle returns and additional service/MOT costs for those in vehicles they were told they would be out of. Lead times of 12 months are making it exceptionally difficult for us and customers to plan renewals.”

The semi-conductor shortages are affecting what manufacturers produce in terms of trim/spec as well as standard items such as remote keys – on some products vehicles are being delivered with only one remote key and one manual spare.

There is concern among brokers that the downgrading of specification is having impact on residual values.

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Chris Wright

Chris Wright

Chris Wright has been covering the automotive industry nationally and internationally for 30 years. Following spells with consumer titles he became News Editor of Automotive Management (AM), Editor of Automotive International, International Editor for Detroit-based Automotive News, and Editor of Dealer Update. He has also co-authored several FT Management Reports and contributes regularly to Justauto.com

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