Derived demand - surge in sales of white vans

Thousands of us who have suffered from the road rage associated with white van drivers may be disturbed to see that demand for medium sized white delivery vans continues to surge.

Clearly the boom in online sales lies at the heart of this change in sales - this is a good example of derived demand in action!

But another factor has been the regulatory impact of a widening of clean-air zones requiring many businesses to upgrade their fleets and purchase low-emission vehicles that meet tighter standards.

The continuing shortage of computer chips, or semiconductors, which affected production of cars and vans during 2021 has reduced the elasticity of supply of new vehicles leading to longer leads times between placing an order and final delivery.