Changing van market demand to put pressure on manufacturers
LCV registrations are at their highest point since pre-recession and this is putting significant pressure on manufacturers, with some facing challenges in order to meet this increase in demand. The fact that manufacturers are planning three, four and even five months in advance, is indicative of the pressure that they are under at this current moment.
This leaves manufacturers with decisions around whether or not to make radical changes in order to meet demand. These changes will include looking at vehicle production and could mean a possible switch to additional shifts in order to meet increased volumes. However, such radical adjustments will have a knock-on effect on operating cost; headcount, purchasing components and investment into machinery, for example. There is also an element of risk in taking this kind of action as such cost increase will have an impact on a manufacturer’s profitability.
Another significant change this year will be the transition from Euro 5 engines to Euro 6 at the back end of this year. Manufacturers hoping to stay competitive will have looked at investment into new technologies in order to reduce the environmental impact of diesel engines. This could potentially impact upon the cost of vehicles, both the original buying price and the costs associated with vehicle maintenance.