The collapse of Skywell’s UK importer this week is further evidence of the risk to fleets of acquiring cars and vans from new entrants, says FleetCheck.
Peter Golding, CEO at the fleet software company, said it was very difficult for vehicle operators to assess which manufacturers would maintain a presence in the longer term.
“The risk can arise at different levels – there is complete manufacturer failure of the kind seen at Fisker a couple of years ago as well as the Skywell-style insolvency of importers.
“It seems inevitable more of each type will follow. We are going through a moment of massive global automotive disruption and quite widespread fallout will be inescapable.”
The super-competitive Chinese car industry was likely to be the most notably affected, he said, but some legacy manufacturers should also be treated with caution.
“The FT and others have been reporting for some time that China is likely to see a wave of major insolvencies and it is probably here where fleets need to tread the most carefully. This is a market awash with relatively recently launched car and van makers and a highly aggressive domestic market, leading to poor balance sheets and resulting export drives.
“However, the increased levels of competition being caused by new entrants is also having an inevitable impact on some of Europe’s longest established brands. While no-one is suggesting a collapse is around the corner, some of these businesses are arguably more vulnerable than at any time in living memory.”
The main risk to fleets from backing the wrong manufacturers was disruption to support, including parts supply and dealer technicians able to repair vehicles, Peter said.
“When we’ve seen this happen historically in the motor industry, such as MG Rover and Saab, the process has been relatively slow and well-managed, so parts supply continued for many years afterwards and technicians with the right expertise could quite easily be found.
“The difference now with new entrants such as Skywell is that the moment is likely to be sudden and chaotic. According to reports, there is some parts inventory in the country but it is unclear whether it is sufficient to support ongoing operations.
“This is a low-level extreme example with a manufacturer that has sold very few cars. However, it is certainly possible that a new entrant which appears much more credible exits the market in a similarly unplanned fashion. Fleets could easily find themselves operating vehicles which end up permanently off-road because even everyday parts can’t be sourced.”
