Fleets are struggling to replace cars due to supply issues
Onwrd subsidiary of AAM Group will support businesses struggling with new vehicle shortages
Vehicle-procurement specialist AAM Group has launched a subsidiary company that will provide bespoke mobility solutions for corporate customers while supply-chain disruption continues to restrict production of new cars and vans.
The new company, named Onwrd, will utilise AAM Group’s relationships with rental servies, accident-management providers, car clubs and subscription services, including its in-house subsidiary Mycardirect.
The combined supplier pool will enable fleets to choose a mixed solution if they’re unable to get vehicles through their usual channels.
Disruption to vehicle production, particularly due to the global shortage of semiconductor chips, has become the number one concern for members of the British Vehicle Rental and Leasing Association (BVRLA), including rental, leasing and fleet management companies responsible for a combined four million cars, vans and trucks in the UK. This is leading to restricted trim and equipment availability, much longer lead times and cancelled orders.
Fleets appear to be disproportionately affected. The SMMT’s April new car registration figures show fleet volumes were down 25.0% year on year during the first four months of 2022, from 308,913 to 231,551 units, with signs that manufacturers are prioritising private customers instead. Retail registrations increased by 17.8% (to 292,206 units) during the same period, accounting for 54.4% of the total market – an almost exact reversal of the fleet and retail split a year ago.
Mark Thompson, managing director of Onwrd, said: “As our proposition evolves, [it] will help customers combat the issues of vehicle shortages by finding more solutions to moving people and goods and keeping them mobile.
“Supply in more conventional channels such as vehicle rental will continue to be constrained, so we’re seeking new ways to address these challenges.”
The launch of Onwrd follows a warning from the Association of Fleet Professionals (AFP) that its members are claiming that daily-rental shortages, which initially affected vans, have spread to cars as well.
Rental companies defleeted large numbers of vehicles following a slump in demand during the pandemic and have since either struggled to replace them or paid much higher prices to do so.
In turn, the AFP added, some operators have been forced to delay servicing and repairs because they can’t get short-term rental vehicles to keep drivers mobile.
Supply challenges are also leaving fleets without a fallback option if their own vehicles break down or are damaged, or for new starters who could now be waiting between six and 12 months for their company car or van.
AFP director James Pestell commented: “The underlying problem is that there are simply too few vehicles around, and until production issues are resolved, the situation will persist.”