What will you do when the semiconductor crisis ends?
Debbie Fox, Commercial Director, epyx
It’s a question that perhaps few vehicle leasing companies appear to have yet considered but some experts are predicting that new car and van production will start to normalise relatively soon. That moment could represent a significant change for remarketing strategies, as the used car markets subsequently readjust over time to something resembling a normal supply situation.
Exactly how this scenario will develop is very difficult to predict, especially when it comes to vehicle values. These have reached historically unprecedented levels over the last two years, making it very difficult not to profit considerably from disposal. However, improved new car and van provision would undoubtedly result in a more balanced supply-and-demand situation, which will inevitably place pressure on values. Add to this unknowns such as the changing end-user appetite for ICE and EVs as we head towards the government’s 2030 electrification deadline, and it is clear that a complicated market landscape is likely to emerge.
That is why now is the time to ensure that your remarketing capabilities are fit for purpose for this coming moment, when maximising returns on defleeting is likely to become quite a lot more difficult than we are currently seeing. At epyx, we’re already finding that some of our more progressive customers have recognised that this situation is looming, and are working to ensure that the infrastructure they have in place provides the data they need to make decisions about remarketing and the ability to then act quickly on those strategies.
We have continued to develop our 1link Disposal Network platform during the pandemic period and enhancements we have made such as the launch of 1link Trade Buyer to maximise dealer engagement, and an increased third party integrations to enable end-to-end digital processes, have been very much designed with this future in mind.
Of course, even if car production worldwide ramped back up to pre-pandemic levels tomorrow, there would still be a massive backlog of orders to fill, so these approaching conditions are not going to arrive in a matter of weeks or even months. But they are coming relatively soon – and major leasing fleets do probably need to start thinking about the consequences.