The demand for vans is rising rapidly and looks set to continue to grow for some time to come. Much of the requirement for additional LCVs has been from the expansion of the home delivery and last-mile markets. While it has always been true to say that pretty much everything that you buy from a supermarket arrived on a truck, these days you could add that almost anything that is delivered to your home or office, will come in the back of a van.
“This is familiar for us at Free2Move Lease, with increased interest in larger vans such as Citroën Relay, Peugeot Boxer and Vauxhall Movano,” said Robert Handyside, head of marketing at Free2Move Lease.
“Smaller vans continue to be popular, but the home delivery market that has influenced the increased demand, tends to run the larger models.”
“Since lockdown restrictions have eased, we’ve found that there has been a notable shift from large conversions, to a more standard fit-out, to meet delivery requirements,” said Paul Hyne, Arval UK’s commercial director.
“This is potentially driven by the need for LCV fleets to remain flexible, while the pandemic remains a key consideration in operational demands. The latest SMMT figures show that the LCV market has returned to pre-Covid levels and, in line with that, our own fleet has continued to grow significantly, indicating a strong demand for LCVs.”
“Enquiry volumes have increased significantly, mainly for medium and large panel vans,” confirmed Keith Hawes, director of Nationwide Vehicle Contracts.
Clive Forsythe, commercial director at Europcar Mobility Group UK added: “As well as a shortage of new vehicles, prices of second-hand vehicles have also increased, creating a perfect storm for businesses that need to expand their fleets.”
This concentrated market demand is pushing some van operators to keep their existing vehicles longer, while they await new deliveries. That can be simply not selling older models where they are purchased, or by extending lease terms for those under some form of rental contract.
“More customers are asking for lease extensions and the funders are putting in place programmes to enable customers to extend for 6-12 months, due to availability,” said Hawes.
“Customers are also looking for short-term leases, to provide interim vehicles until their new vans arrive. However, the rental companies who provide the short-term lease products have little or no availability themselves, as they cannot access new vehicle replacements.”
That’s not the case for all companies, however. Europcar’s Forsyth said: “Through our strong relationships with some leading manufacturers, we have been able to ensure continued access to new vehicles.”
The last-mile delivery sector is not the only driving force behind this rapidly increasing demand. As we’ve reported in VanUser before, a global shortage of computer chips, manufacturing component supply problems, Covid-enforced factory closures and rapidly rising steel costs are all causing headaches for van builders.
“There is a known, global, semi-conductor component shortage that faces the whole industry,” said Handyside.
“We (Stellantis) have parts supply management and make huge efforts in supply chain and engineering, to manage this day by day. We also manage this carefully with our customers, based on their needs, rather than impose a solution like longer rentals, or extensions.
“We are excited at now having an opportunity at the other end of the market too, with Free2Move Rent, where we can now offer short-term solutions for customers.”
“Customers are looking for a flexible solution. We have seen demand for our short-term and mid-term rental LCV product increase. This is helping to manage availability, while the semiconductor issue remains a consideration for a new vehicle order,” said Hyne.
All of this is happening at a time of global change in the light commercial vehicle market. With a UK ban on the sale of new petrol and diesel vans set to come into force in 2030, for many operators that is just two or three vehicle replacement cycles. This in turn is leading a growing number of businesses to look at the rapidly expanding range of electric vehicle options.
“The demand is definitely growing, both in terms of enquiries from existing customers and also from new sectors, where previously EVs have appealed more to public sector organisations, who are environmentally-minded or have requirements for vehicles with limited mileage range,” said Handyside.
“More and more people are realising that an EV van can actually meet their needs and many small businesses don’t actually cover large mileages anyway, so the improved EV ranges are sufficient.”
“The electric van fleet is growing and the demand for products is increasing. We expect the uptake to be significant, as more new models come to market in the coming years,” added Hyne.
“We’re working closely with many of our customers on electric LCV adoption and have seen much more engagement on this subject this year, as evidenced by the level of interest in our recently-published electric LCV real-world testing report.
“There is demand right across the board. Right now, we’re increasingly seeing larger vehicles becoming a need for delivery companies, to support demand developed during the pandemic. Electric vehicles that have the ability to tow a significant load and to support a complex conversion, will definitely be of interest to customers. This increased interest will be met, as new products come to market.”
“As customers have an increasing need for flexible LCV solutions, we are increasingly investing in our short and mid-term rental vehicle fleet. Electric LCVs are available for customers who wish to try out the technology, before they make a long-term commitment to an electric van,” said Hyne.
For more interviews, read “Made to measure“.