Leasing brokers will have to review fleet management as SMR budgets come under pressure

RISING costs and inflationary pressures are putting a strain on SMR budgets, says tyre replacement and servicing specialists ATS Euromaster.

Inflationary pressures are driving up the cost of labour, parts, and materials, making SMR more expensive in a sign that leasing brokers engaged in fleet management will have to work harder on behalf of their clients to help minimise these costs

ATS Euromaster says it has already seen fleets squeezing maintenance programmes.

“Across the market fleets are not spending on SMR to the same level. Everyone seems to be tightening their belts with brakes given lower change rates, for example. Brakes are as important as the contact points on the road but the visibility of such safety items - unlike worn tyres - is not immediately obvious.”

Mark Holland, Operations Director at ATS Euromaster Tweet

Mark points out that running a tighter SMR schedule can impact on vehicle safety and fleet manager duty of care.

Budget tyres cut SMR spend but do they cut it?

ATS says another sign that SMR budgets are being squeezed for 2025 is the de-tiering in tyre brand policy.

Budget tyres can ease pressures on SMR budgets in the short term but may not provide the same level of in-life longevity and require changing more often.

“Again, we would urge fleet managers to ensure they have a firm grip on their fleet’s general maintenance if tyres are being run for longer or budget tyres are on the agenda, then make sure they are appropriate,” adds Mark. “Sacrificing safety for a reduced SMR spend is a no-go zone.”

Be proactive in your fleet inspection programme to minimise costly VOR

ATS advises fleets to be proactive in their approach to fleet inspections and management to minimise costly repairs. Whilst maintenance costs require budget, they keep vehicles on the road and earning.

ATS Euromaster suggests leasing brokers offering fleet management should work with SMR providers more closely to satisfy demands and ensure you can secure the slots for maintenance work as required. Also, a beneficial approach would be to use telematics and data analytics to predict potential failures and schedule maintenance proactively, reducing downtime and unexpected costs – particularly where SMR items are being pushed to the limit.

Geopolitical tensions and lingering supply chain issues may affect new vehicle delivery times

The political instability in the Middle East may well have an impact on economic performance across the globe.

Houthi rebel attacks on ships disrupted trade earlier in 2024, which has increased nervousness around these trade channels, heightened by tensions around use of the important Suez Canal. Further destabilisation in the Middle East could lead to significant supply issues as ships travel further to avoid the troubled area.

What’s more the semiconductor shortages are improving but they have not gone away completely: some industry analysts predict it could persist in certain sectors into 2025 and beyond. Automotive chips, especially those for advanced features, might still be constrained.

Lingering supply chain issues may also continue to affect fleets, particularly if ICE vehicle supply is constrained in favour of electric vehicles to meet enhanced ZEV requirements.

“The likelihood is that we may see a continuation of extended vehicle lifecycles,” notes Mark. “Some fleets are already comfortable with this, but for other fleets it means a requirement for more maintenance needs. Modern vehicles are increasingly complex, with more electronics and sophisticated components. Maintaining older vehicles with these technologies can be challenging.”