Fleets unhappy with rising car prices and discount cuts

 

Carmakers are coming under fire from big fleets for rising prices and discount cuts.

Before the pandemic and the semi-conductor shortage big companies and fleets enjoyed substantial price cuts.

But in the current market, with new vehicles in short supply, carmakers have cut discounts while also targeting more profitable retail business.

The Association of Fleet Professionals (AFP) said it was seeing “substantial price increases and discount rollbacks.”

Paul Hollick, AFP chair, said that the issue was being raised by an increasing number of AFP members, with some reporting that they have seen increases affecting more than 80 different models on their choice lists during the last year, in some instances exceeding £10,000.

“The subject of very long lead times on new vehicles has been widely discussed in the fleet sector. What has received less attention are the price increases that are also occurring.

“Clearly, we are living through a time when there is substantial upwards pressure on prices generally and we understand the many reasons why this is happening but some manufacturers are leaving fleets essentially unsupported, ignoring existing discount agreements and refusing to honour price protection pledges.

“Experienced fleet managers are telling us they’ve never seen prices move up so quickly, in many cases faster than they can easily track in order to keep their choice lists up to date.

“It is creating a situation where, if you manage to get a confirmed order for a vehicle, there is no guarantee you will receive it because a cancellation remains likely and, even if it does arrive after 9-12 months, there is a strong chance that the price will have risen markedly.

“Fleet managers want to continue to nurture sustainable long-term business partnerships but this behaviour, by some manufacturers, is undeniably damaging for future relationships.”

“We’d like to see pricing held for agreed periods of time by manufacturers and, once an order is placed, for that price to be honoured.”