SHORTAGE AND ITS
EFFECT ON FLEET
Between 2018 and 2019, the sales for semiconductor chips declined. Then, when the
COVID-19 pandemic hit, demand for cars collapsed, which prompted car manufacturers to
cancel large orders of semiconductor chips.
However, the demand for new cars recovered faster than expected, putting a stronger
demand for semiconductor chips. According to the Semiconductor Industry Association,
sales in May of 2021 were 26% higher than the same period in 2020.
As such, manufacturers of semiconductors have been struggling to keep pace with the
demand. In turn, companies operating fleets face delays for new cars and van models due
to car manufacturers not getting the chips they need in time.
As the backlog grows, companies face the prospect of rising maintenance costs and
vehicles being out of commission due to aging fleets. This then leads to longer fleet
downtimes, resulting in lower productivity.
WHAT F LEET MANAGERS CAN DO
Fleet vehicles today are enabled by software and connected to the cloud, run by operating systems
that require semiconductor chips. With semiconductor shortages leading to longer lead times for
new vehicles, fleet management becomes more challenging.
Fleet managers need to be proactive to curb the negative effects of this backlog.
·Place vehicle orders as early as possible for the replacement of aging ones in the fleet
·Accelerate the electrification and sustainability of fleets as original equipment manufacturers
(OEMs) prioritize the production of low to zero emission vehicles
·Keep an eye on vehicle availability
In 2022, new facilities that manufacture these chips will be operational, which will help return the
lead times back to normal. However, OEMs will still need to work through the existing demand from
2020 and 2021.
As such, the production lead times of semiconductor chips may not return to normal until 2023. But
with proactive fleet management and by leveraging available technology, companies th