Volvo Sees an Increase in Fleet Demand

Volvo S60

Volvo S60

According to Volvo, some fleets manufacturer lead times have reached critical levels with some holding a full scale review of their car fleet policies in order to ensure employees are provided with a vehicle and can avoid large car hire charges, costly contract extensions or expensive assets depreciating rapidly.

In the last couple of months, Volvo has been added to large fleet's choice lists due to the availability and strong product range. One 850-strong fleet had a choice list of three German car brands, one of which has been replaced by Volvo thanks to the shorter lead times - around 6-8 weeks from its Swedish or Belgian plants.

According to Volvo, some fleets manufacturer lead times have reached critical levels with some holding a full scale review of their car fleet policies in order to ensure employees are provided with a vehicle and can avoid large car hire charges, costly contract extensions or expensive assets depreciating rapidly.

Long lead times are also becoming a challenge for human resources for the company car benefit hierarchy in that prices can rise during the 6-7 month lead time period so a car can move up a band on the company car choice list.

The company then has to decide whether they do not take delivery of the car after a six month waiting time and order a new one, or do they adjust their band pricing accordingly?

"The days of manufacturers holding lots of unsold stock are gone, but the industry should be mindful of the impact long delivery delays are having on the overall UK car market," explained Selwyn Cooper, national corporate operations manager.

"UK fleets are definitely suffering because cars are being supplied to countries like China where there is demand and high levels of profitability, compared with the UK where the currency strength against the Euro and Dollar is constantly squeezing manufacturer profitability. By limiting supply in a market a manufacturer can also start to control and improve used values," he added.

Published 13 October 2011 Staff

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