‘Major’ Defleeting Expected In Light Of The Coronavirus
Coronavirus and Brexit are making it “almost impossible” for the remarketing sector to make long-term plans. In addition, ‘major’ defleeting is expected…
A combination of the ongoing coronavirus pandemic and Brexit uncertainties is making it “almost impossible” for the remarketing sector to make long-term plans. The Vehicle Remarketing Association (VRA) is concerned that strong used car and commercial vehicle sales pose long-term risks.
Sam Watkins, the VRA chair, said “as has been widely reported, the sector is very, very busy; and we are seeing highly unusual trends such as car and van values continuing to rise through the autumn when they would normally be written down”. She continued, “however, those working within the sector are almost obsessively asking when this boom period will come to an end. There is a fear that there must come a point when the coronavirus crisis will really start to have a negative influence. In terms of the impact of factors such as growing unemployment and the end of furloughing”. She suggested that, for an industry so accustomed to accurate forecasting, the uncertainty was “unnerving”. Moreover, she admitted that “there is also a definite fear that the situation could change very quickly”.
‘Major’ Defleeting Around The Corner
One thing the VRA does think is inevitable is large-scale defleeting in the near future. This is because of major daily rental companies holding back on vehicles whilst awaiting awaiting a freer new car supply. Watkins explained, “this would follow on from the restructuring that we have already seen in that sector; especially among businesses being affected by dramatic loss of airport business. This could well be accompanied by a wave of early terminations and short-term contract extensions on personal leasing. However, we just don’t know when this will happen or the extent”. Watkins believes that these ‘waves’ of vehicles could either be absorbed by the market or lead, ultimately, to a realignment of values.
Overall, Watkins believes the uncertainty in the defleeting sector is likely to persist until a vaccine is made widely available; and a resolution between Westminster and Brussels is found (or not). Until then, an otherwise predictable segment is going to have to get used to having lots of unanswered questions.
Chancellor’s Plans Welcomed By The Fleet Industry – https://www.autoservefleet.co.uk/latest-news/chancellor-s-plans-welcomed-by-the-fleet-industry/
Britain’s Car Production Nearly Halved In August – https://autoserve.co.uk/motoring-news/britains-car-production-nearly-halved-in-august/