The New Vehicle Acquisition Process: Why Now is the Time to Be Proactive
Global events of the past few years have drastically affected nearly every part of life, including the automobile and fleet industries. Changes in manufacturing processes, global supply chain issues and demand far outpacing supply have shifted how business is conducted.
For fleets, these changes can significantly impact operations if not properly planned for. In this article, we will take a look at these changes and guide you on positioning your fleet to tackle them moving forward.
Vehicle Order Banks
Historically, auto manufacturers would give plenty of notice when announcing order banks’ opening and closing dates for various models. While shifts sometimes occurred, the process’s stability left fleets ample time to plan and submit orders for the upcoming model year. However, this type of predictability is no longer the case.
Global events such as chip and part shortages, supply chain issues, and factory shutdowns have resulted in a sharp decrease in production from nearly every manufacturer. As a result, order banks that typically would be open for months are now unpredictable. In some cases, fleet dealers submit tens of thousands of orders within minutes of the order bank opening. There have even been instances where order banks are open for less than 24 hours before closing.
This shift means that fleets must be far more proactive than in the past.
Planning and forecasting now must become a top priority. It’s not enough to conduct business as usual and anticipate that orders will be filled. Fleets must work closely with their fleet management partners to strategize their needs and create a plan of action considering the industry constraints. Orders will need to be planned out and submitted to the fleet management companies well before order banks open. Even a slight delay can potentially have a massive impact on vehicle allocation.
Once you’ve planned out and submitted your orders, with ample lead time, you should expect delivery in the usual timeframe, correct? Unfortunately, that is no longer the case.
Not only has the order bank operation changed, but there have also been severe changes in order-to-delivery time. Delays in the manufacturing process due to part or labor shortages, increased freight time both by boat and rail, and increased lead times from vehicle upfitters have all increased delivery timeframes.
In managing a fleet, it is necessary to both anticipate and plan for these changes. Vehicle replacement cycles may need to be adjusted to accommodate the new course of business. This, too, will take coordination and planning to execute smoothly. By being proactive and working far enough in advance, your fleet management partner can help you devise a strategy to move forward with minimal disruption to your ordinary course of operations.
While these new realities are something that will, unfortunately, impact fleets for the foreseeable future, it doesn’t mean that you are powerless. Coordinating an action plan with a fleet management partner like Motorlease will help you navigate these “road bumps” while keeping your fleet running with minimal interruption.
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