Mobility Blog

Car supply challenges shouldn’t slow down your business.

Car supply challenges shouldn’t slow down your business.

Wait times for new vehicles are long, and they may just get longer. Enterprises need to plan well ahead, to ensure their business mobility needs are met on time.

You may have wondered about the long wait times while procuring vehicles for your company. Well, you're not alone. Today, a series of global phenomena have impacted vehicle delivery timelines across markets and manufacturers. 

For businesses looking to maximize opportunities, enabling safer field staff mobility via car leasing is imperative and directly impacts success factors. However, continued supply-side challenges, combined with workforce unavailability and global microchip shortages, point to reduced vehicle availability and ever longer wait times. 

Here's a look at the various factors that could pose as speedbumps in your car procurement journey. 

  • Lower vehicle manufacturing: Considerations such as plant closures and workforce availability impact vehicle production. Some manufacturers tend to bring down overall manufacturing levels based on market conditions like employment rates, which dictate broad demand. For example, during the months of pandemic-related shutdowns or partial closures across industries, many OEMs even stopped production, opting instead to bring forward plant maintenance schedules.
    This produces a domino effect across procurement and distribution, leading to a drop in the availability of cars in the market. So, it's important for enterprises looking at long term car leasing to accurately forecast their future needs. 

  • Shrinking parts and component supplies: The supply chain too would take time to get up and running at capacity, after times of reduced orders by vehicle manufacturers. It'll be a while before suppliers can scale their activities, once orders from car manufacturers begin increasing. This would directly impact vehicle manufacturers’ ability to rapidly increase their own production. 

  • Global automotive semiconductor chip shortage: From even simple in-vehicle functions like headlamp or mirror adjustments, to more complex systems like engine management and safety systems, modern cars rely on microprocessors and integrated chipsets. Large swings in demand from various sectors, like the steep increase in demand from the laptop and mobile device makers during severe pandemic periods, or the short spikes in demand during periods of intense economic activity, cause disruptions in the supply of essential semiconductor-based vehicle components.
    Meeting ramped up demand after durations of slack, or shifting production to automotive needs, puts tremendous pressure on the semiconductor industry. The result, as seen today, there is a gap in the demand and supply of automobile electronic chips. The chip shortage, heightened during the pandemic months, may continue to dampen overall car manufacturing, affecting vehicle delivery. 

  • Pent-up demand and avoidance of public transport: As business activity begins to improve across industries, pandemic-induced precautions may cause corporates to see an increase in demand for leased vehicles. Employees commuting to and from work, or between field locations, may opt for personal vehicles. Safety is increasingly becoming a focus area that impacts working conditions. 
    Companies offering car leasing for employees stand a chance to deliver safer mobility options to their employees and field staff, making them better suited to capitalise on growth opportunities. The ability to work outside of home may also drive leased vehicle demand at corporates. Employees looking at mobility options should consider opting for full-service car leasing due to the multiple advantages it offers. 

Adapting to change

Corporates will need to be cognizant of their upcoming mobility needs and internal demand to continue uninterrupted business. They need to plan ahead, and place their orders well in advance, to deal better with longer waiting periods. 

Businesses should also look to adapt to the situation, through lease extensions on the current vehicles, or rethinking their car policies to make procurement more flexible by making available various makes from different manufacturers under each category. 

Venkatesh K, Country Head of Sales, ALD India believes now is a good time to look beyond conventional options, towards electric mobility. “Today, electric vehicles still forms only a small portion of the car market. Early movers can reap the benefits of subsidies offered by the government, lower maintenance and running cost in the long run, while also being able to offset the higher purchase cost by getting electric cars on lease

Business car leasing companies like ALD Automotive, provide a wide range of vehicles across brands, to suit every corporate need. And our expert car procurement teams are constantly in touch with the local car suppliers and car manufacturers, thereby, we can help in providing the best approach to enterprises to optimize their fleet planning in this situation. 
If you are already partnered with ALD, you can get in touch with the regional manager allocated to your organisation for support. 

For assistance with procuring best-in-class leased cars for corporates fill out our contact form.