In February, SG Fleet released its first half results which provided a look at the trading conditions during the second half of 2023. While all the financial measures were good for investors, the commentary suggested Fleet Managers still have a few years before their replacement programs will get back on track.
SG Fleet’s order pipeline for tool-of-trade fleet vehicles remained stable during the six month period despite deliveries being up 14%. Delivery delays are also continuing due to a shortage of aftermarket supplies, and long lead times for production slots with body builders, despite the increase in supply.
A warning sign for Fleet Managers reviewing budgets for FY24/25 is the price inflation of new vehicles and the corresponding decline in used vehicle prices.
The used value for ex-fleet vehicles fell 8% in the last six months despite the continued supply constraints. SG Fleet reported prices were 134% of pre-COVID levels compared to 142% in the previous period. While there was an increase in the average funded capital (vehicle prices) of 13.9%.
A swing of 22% in a short period of time will impact an organisation’s cashflow and capital requirements if Fleet Managers can’t work with their finance colleagues to get budgets adjusted.
