A WLTP-prompted shortage in the supply of new vehicles has resulted in daily rental companies turning to the used car market to replenish their fleets, the Vehicle Remarketing Association (VRA) has said.
AM reported in last month’s edition how many manufacturers have cut vehicle ranges and tightened up supply as they battle with the logistics of re-testing their ranges to meet the EU’s Worldwide Harmonised Light Vehicle Test Procedure (WLTP) and Real Driving Emissions (RDE) tests ahead of their introduction on September 1.
In this month’s AM, the results of a survey of retailers revealed that OEMs have informed 55.6% of dealers to expect a restricted supply of vehicles as they battle to re-test, and in some cases redevelop, their engine line-ups to abide by the new legislation.
The effects are already impacting daily rental firm, according to the VRA, with operators turning to the purchase of small batches of small-medium sized cars that are less than six months old in a bid to plug the gap.
Glenn Sturley, chairman at the VRA, said: “The partial shift to used purchasing does show how limited new car supply has become for some buyers in some areas of the market, caused by factors such as WLTP and the buoyant new car market elsewhere in Europe taking preference.
“We have seen a number of manufacturers pull back quite significantly from the rental sector in the last year, especially some of those who have supplied superminis in larger volumes.
“Also, even those who continue to push larger numbers of cars into the sector are often suffering from supply issues.
“This means that simply to meet their requirement for vehicles, some rental companies are having to look beyond traditional sources and have been entering the nearly-new sector instead, buying batches of cars to meet their needs, our members are reporting.”
Sturley said that the shortfall in new car supply was something that “happens periodically” but added that there did appear to be at quite a high level at the moment.
He added that the trend appears to be helping to maintain values in this part of the market, especially when it comes to superminis and city cars, with the latter doing especially well.
Sturley conceded that new car daily rental business tended to be cyclical and depended very much on vehicle supply at any given time.
He said: “To some extent, daily rental business has got a bad name that it doesn’t really deserve. There is a tendency to think of manufacturers using it to ‘dump’ large numbers of new cars onto the market, which that is something that hasn’t happened for many years.
“Volumes of manufacturer daily rental business do tend to depend on supply at any given time but it is an important element in the remarketing sector and is nearly always used responsibly nowadays.”