Companies thinking of investing in new or replacement vans this year will need to get their orders in quickly, as supply chain problems threaten to delay production and lead to extended delivery times. It has been well documented that there is a global shortage of computer microchips, which are used in many systems within cars and vans. There are also said to be global problems with rubber delivery, used in all manner of insulation, mounting components, suspension and of course tyres.
These delays to production lines, many of which have themselves been partially closed due to pandemic shutdowns, are already leading to growing waiting lists for new vehicles. This in turn, is pushing up the price of used vans, as last-mile delivery companies in particular seek to boost their fleet numbers.
“We foresee disruption in the wholesale market well into 2022,” said James Davis, customer insight director at Cox Automotive, parent company of auctioneer Manheim.
“We’ve all seen the challenges the new vehicle sector is experiencing with raw material and component shortages. This is having a profound effect on the used market, delaying de-fleet programmes and affecting the flow of used stock to wholesale. Supply and demand of new and therefore used vans will remain in flux until new lead times and supply levels return to pre-pandemic times.”
Cox Automotive reports that there are warnings from within the industry of acute lead time extensions, with some volume OEMs now stating up to 12 months for delivery of their most popular models. Raw material and microchip shortages, coupled with production and logistical challenges due to COVID-compliant working practices, are seeing some factory production severely restricted or even halted. Manufacturers are working with suppliers to allocate available resources to ultimately determine which models should be prioritised for production.
“We are in uncharted waters and clearly this places more pressure on the remaining months of 2021 to ramp up new registrations to hit the SMMT’s upward revised forecast,” said Davis.
“With lead times for new Euro 6 vans impacted, used Euro 6 van prices will continue to rise. Clearly this distinct two-tier wholesale market of Euro 6 and pre-Euro 6 stock is seeing ever increasing divergence in the average sale prices, but used van inflation is baked into the market now and we do not foresee any price realignment or crash. Until the flow of new vans recovers, the supply constriction of de-fleeted and part exchanged used vans will cause a supply crisis for the wholesale market.”