Why are van stock levels so low?

by | Mar 14, 2021 | All Articles, Vans | 0 comments

Issues getting hold of new vans are down to both Supply & Demand.

I wrote recently that March was an excellent month for buying in new vans for your business – and to get any orders in early.

The problem is we have heard several reports of supply issues – and on looking into it – there is definitely a problem getting hold of new vans. 

Here we look at what factors are involved. 

When the Microchips are down….

One of the main issues is that the supply chain is being affected by a shortage of Semiconductors – basically microchips which are responsible for many of the crucial functions of a modern vehicle.

The issue seems to have been caused by a couple of factors.

Firstly, carmakers revised down their demand for ordering Semiconductors because of the Pandemic – whilst demand for the microchips shot up in other sectors (such as smartphones and games console companies).

As a result, the microchip manufacturers pivoted to these industries to meet the demand. However, the demand for vehicles has since shot back up, leaving a huge supply issue.

In addition to the increase in demand, the issue is compounded by the fact that new models of vehicles are requiring more semiconductors than previous models (e.g. the Nissan Qashqai having 50% more sensors than the previous model).

The Impact

The issue has been so bad, various car manufacturers have halted or delayed production over the last few months.

Nissan in Sunderland halted production on the new Qashqai back in January due to parts hold-ups at Felixstowe.

Whilst this isn’t forecasted to be a long-term issue, analysts have said that March will be a particularly tough month – especially with the switch to the new ’71 registration plate.

The same analysts are also hopeful that issue is expected to be resolved by the summer.

The Recent Budget

There was an announcement in the recent budget that could also put a squeeze on demand for vans.

The announcement was for a “Super-deduction”. This means that From 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will be able to claim:

• 130% super-deduction capital allowance on qualifying plant and machinery investments
• 50% first-year allowance for qualifying special rate assets

Having looked into this – the purchasing of vans would be allowed under the qualifying “plant and machinery”.

The super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest – leading to a further surge in demand where supply is already stretched and fragmented.

What does this all mean?

In a nutshell, this makes sourcing the best deals harder. There are already reports of some models now not being available until June/July.

There are great deals to be had out there – particularly on “end-model” vans and cars – but if you want to stand a chance on getting a good deal on a new van – then you will need to move much quicker than you perhaps were intending.

If you are looking for any vans in particular then drop us a line below. One of our team will be happy to advise you what’s out there for your particular needs.

4 + 10 =

Fleet Advisor ad

Pin It on Pinterest