AM Online

Lead times adding to market challenges

Long vehicle lead times are continuing to be an issue in the market place, with some companies axing brands from their company car choice lists.

Fleet managers in particular have been forced to play the waiting game for the past three years due to the economic downturn, higher European demand for low CO2 models and the impact of the earthquake in Japan earlier this year.

Although things are improving – there is a 14-18 week wait for the average factory-ordered car compared to 18-20 weeks six to 12 months ago according to the British Vehicle Rental and Leasing Association – there are still issues with a number of models.

“We’ve extended contracts where possible, but until lead times improve it’s easier to steer employees away from those models where we know lead times are an issue,” said one fleet manager, who did not want to be named.

The situation is also causing friction between leasing companies and manufacturers.

Tim Bowden, head of operations at Hitachi Capital Vehicle Solutions and chairman of the BVRLA’s technical and operational management committee, said: “Communication and accuracy of lead times has improved, but it has been frustrating that the apparent desire of some manufacturers to avoid bad news has given some customers the impression that leasing company inefficiencies are to blame.”

The BVRLA said some manufacturers have increased production and many of those affected by the Japanese crisis have found alternative sources for parts or changed their model trim.
Toyota said its core products are sourced in Europe and anyone ordering European product now would not experience a significant delay.

As Japan has been back to full production since July, six to eight weeks is now the normal lead time for Lexus CT orders.

However, other premium brands have issues due to higher demand than predicted.
Audi is facing “challenges” with the A4 saloon, A5 Sportback and Q7. All build slots for the A4 saloon are now filled for 2011, although Audi Centres will have the opportunity to reassign and amend a proportion of the orders filling the build slots if they have customer demand.

“Availability very much depends on the Audi Centre in question,” an Audi spokesman said.

Most BMW models have a three to four month lead time. However, customers who order an X3 are looking at delivery in February due to a limited allocation of right-hand drive models.

Stephen Chater, corporate operations manager for BMW, said: “I don’t think we have longer lead times than any other manufacturer and the spotlight is not on us. I am pretty comfortable that we are meeting our customers’ expectations.”

Volkswagen has increased allocation for key cars such as the Passat.

A spokesman said DSG supply has been much better this year although there are still some restrictions on availability.

However, some manufacturers may capitalise on the long lead times of others, with Steve Jelliss, fleet and remarketing director at Mazda, claiming the Mazda6 Business Line is well positioned to fill the gap.

Given its tax rating, specification levels and the fact there are long waiting lists for many alternatives from other manufacturers we are anticipating strong demand for the car,” he said.

 

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