State Of The Nation


State of the Nation - Current Automotive Market Supply Conditions

Paul Parkinson, Founder and CEO of Synergy Car Leasing, gives an update on the current lease market as we move into the new financial year, as external forces continue to be a driving force.

The global automotive industry is under pressure due to a myriad of factors which are affecting supply.  Demand for lease vehicles remains high, and our professional team are on hand to talk you through the longer-than normal lead times we are experiencing and guide you through vehicle availability as well as alternative choices of vehicle.  

There continues to be a shortage of semi-conductor chips.  Many of these chips are used throughout new vehicles from everything from infotainment systems to engine management and are an essential part of modern cars and vans.  This shortage is due to 2020 Covid restrictions globally, staff shortages, extreme weather and factory fires in the Far East as well as a limited number of factories producing the chips around the world.  Both the EU and the US government are focussing on increasing production of these chips in their own territories; however it takes a minimum of 6 months to set up these specialist facilities.  This also means that some vehicles have reduced specifications to minimise the number of chips used in the vehicle, and we have also seen some vehicles delivered with one key, again to reduce the number of chips used in the vehicles manufacture.

The crisis in Ukraine, although first and foremost a humanitarian crisis, is also affecting the automotive industry, as many component factories supplying European manufacturers are based there.  Although manufacturers are shifting their suppliers elsewhere, this is currently having a knock-on effect to global supply.

Recent logistics and supply challenges have also played part in the current market situation. A shortage of hauliers across UK, Europe and the USA means parts and supplies can take longer to arrive and exacerbate already stretched supply chains.

Despite these challenges, we are seeing that the transition to electric and hybrid vehicles is very much accelerating.  This is being driven by low benefit-in-kind tax for company car and salary sacrifice drivers, the desire to save on ever increasing traditional fuel costs and the demand to be more environmentally friendly.  In addition, manufacturers are incentivised to sell more EVs rather than the traditional combustion engine vehicles to meet emission targets, so there is more availability of electric vehicles in many cases.

There are several actions we can take to help positively influence the current situation:

- Talk to our team – our friendly and professional account managers are on hand 7 days a week to chat to you about the options available and lead times

- Plan ahead – if you are already in a lease vehicle and plan to renew your lease with a new vehicle, talk to us sooner rather than later.  We can give you an update on current availability and secure your factory order. 

- Act quickly to secure your lease – there are pockets of highly desirable stock vehicles, and  they are taken up very quickly.  So if you can take advantage of a stock deal we suggest you act quickly to secure your lease, and our team can support you with our easy, online application process.  

- Consider alternative vehicles – our team have access to UK-wide real-time manufacturer stock list and lead times, and there are some great vehicles available offering fantastic technology and value for money which may not immediately spring to mind. Our team can guide you through the options available.