Semi-conductor shortage drives strong growth in short-term leasing

Aartselaar, Belgium, 21 December 2021 – Research carried out by DataSynergy on behalf of Alphabet, the leading supplier of mobility solutions, has revealed a direct link between the strong growth in short-term leasing and the shortage of semi-conductors in the global marketplace. This shortage has led to longer delivery times for new vehicles, a development that has forced fleet managers to lease vehicles to bridge the gap. At the same time, some drivers are postponing their decision for the time being, opting to wait for their preferred electric vehicle to become available instead of purchasing one with a diesel or petrol engine now.

“We have seen a sharp rise in demand for short-term leasing over the past year, and we were curious as to whether this is a temporary development. For instance, perhaps fleet managers are looking for more flexible mobility solutions in the face of uncertainties surrounding the COVID pandemic. However, the research revealed that rental vehicles are being used to solve problems caused by the extended delivery time for new vehicles, a situation caused by the shortage of semi-conductors,” explains Tina Gysen, Manager Corporate Mobility Services at Alphabet.

Rental cars still make up only a limited part of fleets. Of the Belgian companies surveyed, one in five reported having at least one short-term lease vehicle. This percentage is linked to fleet size, rising to 27% in mid-size fleets (11 to 50 vehicles) and 43% in large fleets (more than 50 vehicles). In those that do have rental vehicles in their fleets, 70% report having fewer than five lease contracts.

Fleet managers also report using various strategies to cope with long delivery times. Besides short-term leasing, solutions have also included extending existing leasing contracts, prolonging the use of vehicles whose lease terms have not yet expired, and purchasing used but relatively newer vehicles in the second-hand marketplace. Fleet managers mainly opt for short-term leasing when there is more inflow of employees than outflow, and thus not enough vehicles available for staff. ​ ​

Diversified mobility

When researchers asked fleet managers to identify their major challenges, one of the biggest turned out to be ​ ​ the transition from a vehicle-oriented policy to a more balanced mix of mobility solutions. Special care and attention are required in a number of areas, including:

“Despite a shift towards more diverse mobility options, the car continues to play the main role. Not only does it have an emotional value for employees, but some businesses are located in places that are simply inaccessible by other means. It is also apparent that not all companies are transitioning to diversified mobility at the same speed, and that quite a lot of questions remain unanswered. Even so, businesses must be able to offer a wider choice if they are going to meet the demands of new employees and attract the talent they need,” says Bart Cornu, sales director at Alphabet.

The role of the shared car in a diversified mobility model remains limited, with only 22% of businesses surveyed saying they have at least one shared vehicle in their fleet. Again, this percentage is linked to fleet size, rising to 29% in mid-size fleets and 31% in large fleets. Of all of these, 78% report having fewer than five contracts for shared vehicles. Management of shared vehicles is mostly done in-house and with simple tools, such as using Outlook to reserve a car or an Excel-spreadsheet. While not optimal, this is still an acceptable approach, and 95% of businesses are not interested in outsourcing the management of their shared vehicles.

The research was carried out in the Belgian market and entailed qualitative and quantitative components. Data collection took place via a survey of 260 fleet managers in small, medium and large companies between late October and early December 2021.