Why lower new car sales mean a bigger focus on SMR

Why lower new car sales mean a bigger focus on SMR

You’ll probably have already noticed that fleet new car sales are down again. In June, according to the SMMT, there were 133,310 new cars registered to fleets and businesses, a 5% fall year-on-year. In total, the market is down about 3.4% so far this year.

The reasons for this are probably no mystery – continuing political uncertainty on a grand scale, confusion over company car taxation, the ongoing decline of diesel, changes to grants for new fuel types and more. It’s a time when there are many challenges.

Of course, lower company car sales mean that people are hanging on to vehicles for longer and, because of this, servicing, maintenance and repair are becoming more of a focus. Older cars break down more often, need new tyres and brake pads and other consumables, are probably out of warranty and also have to undergo MOTs. Operating a 4-5-year-old vehicle, in terms of their SMR profile, is definitely more challenging than a 2-3-year-old one.

What this means is that many fleets are having to start to look at SMR in a more exacting fashion. Duty of care responsibilities mean that it is a subject that has to be taken seriously without any corners being cut, even if you are just deferring replacing a car for a few months.

Because 1link Service Network is used by fleets operating millions of vehicles, epyx has excellent insight into how these trends are developing and can also offer wide ranging and effective advice about how to handle this changing SMR landscape. The fact is that there are proven and effective strategies for keeping older vehicles on the road while minimising costs that could otherwise spiral out of control.

Another aspect of this development is that many fleets will be weighing up whether to hang onto cars that are getting more expensive to maintain or to commit to acquiring new vehicles. This decision is often based on emotional factors as much as anything – it can simply feel wrong to be signing new leases when there is so much bad economic news in the press. However, the decision can also be made on a very structured basis, measuring the likely SMR budget against the cost of new car acquisition.

With many of the factors leading to the ongoing fall in new company car sales unlikely to be resolved soon, this is a topic that is going to grow in importance over the coming months, we believe.

 

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