The Year in Focus; automotive and leasing sectors
Paul Parkinson, CEO & Founder of Synergy Car Leasing, a leading UK vehicle leasing provider, gives his perspective on the automotive and leasing sectors looking back over the pandemic period and and forward into 2022.
In nearly two difficult years for high street retail, vehicle leasing, amongst other high-value transactional sectors, has seen increased activity as business users, as well as consumers, become more confident making larger transactions online. Synergy’s core value of delivering an excellent leasing experience to our clients and keeping them at the heart of the business during these difficult times, supported by our panel of carefully selected funders and our direct access to vehicle manufacturers’, allow us to a deliver a product and service that is fit for purpose in 2021 and beyond.
The pandemic slowdown
Increased demand following national lockdowns saw spikes in sales for both cars and vans, and is now contributing to global automotive supply chain challenges. There are significant delays due to a shortage, primarily, of semi-conductor computer chips which power touchscreens and other advanced technology throughout the vehicle, in addition to parts and labour shortages, meaning that lead times for popular vehicles currently can be up to 12 months.
Both business and personal customers are now more aware of delays and supply line reduction. Armed with this information, we are seeing orders being processed earlier, extension of existing contracts and an uptake in short-term lease solutions.
“The Switch”: With production restrictions and delivery delays affecting major premium brands, we’re helping our clients, not only with the above solutions but also, in more and more cases, to select an appropriate alternative choice of vehicle. Our extensive network of suppliers means we can offer all available makes and models, while still offering a variety of short- and medium-term mobility solutions.
ULEZ and the rise of the electric vehicle
2021 is the year for accelerated electric vehicle adoption, driven by a highly attractive benefit-in-kind tax proposition, government grants, favourable business lease rentals and significant savings comparing petrol and/or diesel to electricity purchased by the kilowatt.
According to the Society of Motor Manufacturers and Traders (SMMT), plug-in vehicles now account for 16.6% of all new car registrations in 2021*, which, when joined by a further 9.1% from hybrid electric vehicles means that 25.7%, or more than a quarter of the new car market, has been electrified year-to-date (October 2021).
Electric vehicles can save thousands of pounds in monthly tax deductions for company car and salary sacrifice drivers, and, with the current focus globally on targets to meet net-zero, London’s ULEZ zone and other larger cities across the UK introducing their own clean air zones with varying rules, driving a zero-emissions electric vehicle makes financial sense for both business contract hire and personal contract hire agreements.
Grants for chargers at both business premises and domestic addresses are expected to continue until the end of the current financial year, when the government is expected to then focus on developing public charging infrastructure to accelerate the transition to electric.
We’ve also recently seen a government pledge that homes, supermarkets and workplaces built in England will be required to have electric vehicle charging points by law from next year, further fast-tracking the move to electric.
New trends in the new year
We will see lead-times reduce and start to return to normal during 2022, and we expect that demand will remain high for new vehicles. Without a doubt, the focus will be on electric vehicles as charging infrastructure continues to improve along with greater model choice and diversity, and, of course, more range per quicker charge.
With all the challenges faced by our sector and the continued uncertainty around the Covid-pandemic, we at Synergy Car Leasing are taking nothing for granted. Communicating clearly and in a timely way working to manage our clients’ expectations to deliver the best solution possible is our daily purpose.
About Synergy Car Leasing
Synergy Car Leasing is a nationwide automotive finance credit broker, achieving the Feefo Platinum Trusted Service Award, for best-in-class customer service over successive years. Synergy has been awarded the Leasing Broker Federation’s Best Medium Leasing Broker and Best Medium Leasing Broker for Customer Service 2021-2022. www.synergycarleasing.co.uk