{"id":12054,"date":"2021-08-11T16:15:26","date_gmt":"2021-08-11T14:15:26","guid":{"rendered":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/?p=12054"},"modified":"2021-08-11T16:18:34","modified_gmt":"2021-08-11T14:18:34","slug":"fleet-vehicles-4","status":"publish","type":"post","link":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/2021\/08\/11\/fleet-vehicles-4\/","title":{"rendered":"Strong Buying Inclinations for Fleet Vehicles in 2022"},"content":{"rendered":"<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\"><b>Credit: Gettyimages<\/b><\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Most commercial fleets plan to order more vehicles in the 2022 model-year than last year, but almost all qualified the forecast by saying \u201cIf\u2026\u201d<\/span><\/p>\n<div class=\"incontent02Ad\" style=\"text-align: justify;\"><\/div>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Here\u2019s an example: \u201cWe will be ordering more vehicles in MY-2022 if (and that\u2019s the big \u2018if\u2019) the OEMs can deliver them when needed,\u201d said one fleet manager who participated in the survey only under the assurance of anonymity.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">The \u201cif\u201d ran the gamut in terms of external factors, but primarily focused on vehicle availability, the resolution of the microchip shortage, an improving business climate (economic factors), and the forecast of ongoing internal business growth.<\/span><\/p>\n<div id=\"incontent01Form\" style=\"text-align: justify;\"><\/div>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cProduct availability is an absolute disaster right now. It\u2019s having a negative impact on our business and will change some supplier relationships long after the supply issue is solved,\u201d said one fleet manager, who asked not to be identified<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">A recurring theme from some fleet managers was strained supplier relationships and perceived shortcomings in customer service.<\/span><\/p>\n<div id=\"div-gpt-ad-incontent01\" class=\"banner-im\" style=\"text-align: justify;\"><\/div>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cOne key factors that will influence MY-2022 buying decisions is looking heavily at how the OEMs handle customer service based on the shortages in the last model-year,\u201d said Lisa Kneggs, fleet manager for FleetPride.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Many fleets will play catch-up with their vehicle replacement volumes. \u201cWe will order more vehicles. Due to the supply chain shortage, we did not order as many vehicles as anticipated in 2021. Hopefully, we will not have the same issues for 2022,\u201d said Jim Petrillo, manager treasury services &amp; fleet management for Fujifilm Holdings America Corp.<\/span><\/p>\n<figure class=\"article-img\" style=\"text-align: justify;\"><span style=\"color: #0000ff;\"><img loading=\"lazy\" class=\"wrapImageCMS alignleft\" src=\"https:\/\/fleetimages.bobitstudios.com\/upload\/global-fleet-management\/content\/article\/2021-07\/jim-petrillo-__-720x516-s.jpg\" alt=\"PETRILLO - \" width=\"227\" height=\"250\" \/><\/span><figcaption class=\"caption-description\">&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"color: #0000ff;\">PETRILLO<\/span><\/p>\n<\/figcaption><\/figure>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Another major fleet seeking to order more vehicles in the 2022 model-year is Cox Enterprises. \u201cWe will most likely be ordering more vehicles in 2022 as the ongoing chip shortage is limiting our orders this year,\u201d said Mark Leuenberger, \u00a0VP, Enterprise Vehicle Operations &amp; Logistics for Cox Enterprises.<\/span><\/p>\n<figure class=\"article-img\" style=\"text-align: justify;\"><span style=\"color: #0000ff;\"><img loading=\"lazy\" class=\"wrapImageCMS alignleft\" src=\"https:\/\/fleetimages.bobitstudios.com\/upload\/global-fleet-management\/content\/article\/2021-07\/mark-leuenberger-__-720x516-s.jpg\" alt=\"LEUENBERGER - \" width=\"274\" height=\"274\" \/><\/span><figcaption class=\"caption-description\"><span style=\"color: #0000ff;\"><\/p>\n<p>LEUENBERGER<\/span><\/figcaption><\/figure>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Because of the difficulties in sourcing high-demand vehicles during the 2021 model-year, most of the fleets responding to the 2022 model-year buying inclination survey said they would be acquiring more vehicles in 2022 to replace aging units.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cWe will acquire more vehicles in 2022.\u00a0 Frankly, we could not get vehicles in 2021, and our company is in a growth mode. It has been difficult,\u201d said a fleet manager who also asked to be kept anonymous.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">This sentiment was repeated by many other fleet managers. \u201cVehicle manufacturers need to increase the number of vehicles built and have upfitters\u2019 support to build bodies and equipment,\u201d said Charlie Stevenson, vice president, operations for Essential Utilities.<\/span><\/p>\n<figure class=\"article-img\" style=\"text-align: justify;\"><span style=\"color: #0000ff;\"><img loading=\"lazy\" class=\"wrapImageCMS alignleft\" src=\"https:\/\/fleetimages.bobitstudios.com\/upload\/global-fleet-management\/content\/article\/2021-07\/charlie-stevenson-__-720x516-s.jpg\" alt=\"STEVENSON - \" width=\"243\" height=\"243\" \/><\/span><figcaption class=\"caption-description\"><span style=\"color: #0000ff;\"><\/p>\n<p>STEVENSON<\/span><\/figcaption><\/figure>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Other industry segments, such as the oil and gas industry has been experiencing severe budget constraints, which has caused them in recent years to extend the service lives of their vehicles to the point where it is no longer financially prudent to extend them another year.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cMost likely we will purchase more vehicles. We have not purchased for about two years now and we have a fleet that is getting a bit \u2018long in the tooth,\u2019\u201d said Kimberly Fisher, global manager fleet and travel for National Oilwell Varco. \u201cCost will influence this greatly. We are still in a cost saving mode so cost will remain a key factory. Availability will also be a big key factor. Delivery time will be another. With the shortages that are happening globally, time to market is even more important.\u201d<\/span><\/p>\n<figure class=\"article-img\" style=\"text-align: justify;\"><span style=\"color: #0000ff;\"><img loading=\"lazy\" class=\"wrapImageCMS alignleft\" src=\"https:\/\/fleetimages.bobitstudios.com\/upload\/global-fleet-management\/content\/article\/2021-07\/kimberly-fisher_new2021-__-720x516-s.jpg\" alt=\"FISHER - \" width=\"238\" height=\"297\" \/><\/span><figcaption class=\"caption-description\">&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"color: #0000ff;\">FISHER<\/span><\/p>\n<\/figcaption><\/figure>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Of those fleets indicating that they will acquire fewer vehicles in 2022 compared to 2021, one reason has been due to prior year acquisitions. \u201cWe will acquire fewer vehicles in 2022,\u201d said Vin Ricciardi, North American sales fleet senior manager for Mondelez International. \u201cPrior to the start of the pandemic, we placed one of our largest annual fleet orders.\u201d<\/span><\/p>\n<figure class=\"article-img float-margin\" style=\"text-align: justify;\"><span style=\"color: #0000ff;\"><img loading=\"lazy\" class=\"wrapImageCMS alignleft\" src=\"https:\/\/fleetimages.bobitstudios.com\/upload\/global-fleet-management\/content\/article\/2021-07\/vin-ricciard-__-720x516-s.jpg\" alt=\" - \" width=\"258\" height=\"267\" \/><\/span><\/figure>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Other companies are planning to order fewer units due to ongoing reduction in force (RIF), creating surplus vehicles without the need to replace them.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Perhaps more so than in prior years, most fleets will be looking to early order their vehicles as soon as the OEM 2022-model order banks open. This sentiment is captured in the following quote: \u201cI\u2019m ordering as early as possible to wait in line first,\u201d said one fleet manager.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Another factor contributing to longer service lives has been the ongoing microchip shortage that is slowing the production of new vehicles.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cSome of our vehicles that were to be changed out earlier this year, but couldn&#8217;t due to the microchip shortage, will remain on the road until we can order 2022 replacements,\u201d said Petrillo of Fujifilm.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">However, many fleet managers foresee the shortage of vehicles, especially high-demand vehicles, continuing into the start of the 2022 model-year.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cWith microchip shortage and the strong used-vehicle market, instead of TCO driving our vehicle selector, the manufacturer that can produce vehicles the quickest will probably be main factor in determining our vehicle selector,\u201d said another fleet manager.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Other fleets are maintaining the same replacement cycles, but will be ordering fewer vehicles because their companies are not replacing those lost through attrition. \u201cI will be replacing vehicles within the same parameters but there will be about 10% fewer cars due to attrition,\u201d said Nancy Murray, CAFM, senior manager, general services &amp; travel for Agfa Corporation. \u00a0<\/span><\/p>\n<figure class=\"article-img\" style=\"text-align: justify;\"><span style=\"color: #0000ff;\"><img loading=\"lazy\" class=\"wrapImageCMS alignleft\" src=\"https:\/\/fleetimages.bobitstudios.com\/upload\/global-fleet-management\/content\/article\/2021-07\/murray_nancy-agfa-__-720x516-s.jpg\" alt=\"MURRAY - \" width=\"317\" height=\"222\" \/><\/span><\/figure>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"color: #0000ff;\">MURRAY<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Another factor that will impact 2022 orders is the confidence in the delivery of vehicles when needed in a company\u2019s business cycle. \u201cThe main acquisition factors will be availability and delivery times,\u201d said Mel Pawlisz, fleet administrator for HR Green. \u201cOur business ramps up in the spring so the vehicles need to be built, upfitted, and ready to go by the beginning of March.\u201d<\/span><\/p>\n<figure class=\"article-img\" style=\"text-align: justify;\"><span style=\"color: #0000ff;\"><img loading=\"lazy\" class=\"wrapImageCMS alignleft\" src=\"https:\/\/fleetimages.bobitstudios.com\/upload\/global-fleet-management\/content\/article\/2021-07\/melvin-pawlisz-__-720x516-s.jpg\" alt=\"PAWLISZ - \" width=\"270\" height=\"350\" \/><\/span><figcaption class=\"caption-description\"><span style=\"color: #0000ff;\">PAWLISZ<\/span><\/p>\n<\/figcaption><\/figure>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">In terms of internal factors, budget constraints factored high in acquisition considerations. Many budget are already set and are close to flat compared to last year\u2019s budget.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<figure class=\"article-img float-margin\" style=\"text-align: justify;\"><span style=\"color: #0000ff;\"><img loading=\"lazy\" class=\"wrapImageCMS alignleft\" src=\"https:\/\/fleetimages.bobitstudios.com\/upload\/global-fleet-management\/content\/article\/2021-07\/schreiber_phil-__-720x516-s.jpg\" alt=\"SCHREIBER - \" width=\"261\" height=\"282\" \/><\/span><figcaption class=\"caption-description\">&nbsp;<\/p>\n<p><span style=\"color: #0000ff;\">SCHREIBER<\/span><\/p>\n<\/figcaption><\/figure>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">&#8220;The fleet will need to continue its vehicle replacement plan or risk fleet degradation. The main deciding factor will be how much will the company afford, or give us to support this effort,\u201d said Phil Schreiber, contract specialist for Schindler. \u201cWith 2020 financials not being the best, I would assume that most companies with large fleets will replace fewer vehicles. My guess will be 50% &#8211; 70% of the actual number of vehicles that need to replaced, and will take a chance on the other vehicles by prolonging the MIS (months in service) for these units. Of course, 50% is better than nothing; however, it will create a future bubble and in the next year the number of vehicles slotted for replacement will be much larger.\u201d<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">As the economy reopens, fleet vehicles are adding more miles accelerating\u00a0 to their mileage threshold of their traditional mileage replacement parameters.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cWith the pandemic there was a reduction in miles driven,\u201d said one fleet manager who wished to remain unidentified. \u201cGiven the improved economic environment, we anticipate an increase in mileages and fuel usage, trending toward normal levels.\u201d<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Another impact of the longer service lives is increased maintenance expenses.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cMY-2021 was more impacted than MY-2022 will be because we couldn\u2019t plan due to the current mess. We are incurring more maintenance costs now because we are still waiting for delivery of vehicles we ordered Dec.1, 2020. With that in mind, next year we are moving up our typical replacement mileage to account for the inability to obtain vehicles in a more timely manner,\u201d said a fleet manager.<\/span><\/p>\n<h2 style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Early Ordering of 2022 Models<\/span><\/h2>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">One of the biggest factors that fleet managers cite that will influence their 2022 model-year orders is order-to-delivery times. As lead times have lengthened, fleets are ordering replacement vehicles earlier than normal<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cThe ability for the OEMs to guarantee delivery of vehicles is crucial. In preparation, we are moving up planning and internal order memos so we can place orders immediately upon production starting. Hopefully, this will ensure delivery of built vehicles. This should also help order-to-delivery delays in shipping,\u201d said another fleet manager.<\/span><\/p>\n<figure class=\"article-img float-margin\" style=\"text-align: justify;\"><span style=\"color: #0000ff;\"><img loading=\"lazy\" class=\"wrapImageCMS alignleft\" src=\"https:\/\/fleetimages.bobitstudios.com\/upload\/global-fleet-management\/content\/article\/2021-07\/jonathan-kamanns-__-720x516-s.jpg\" alt=\"KAMANN - \" width=\"234\" height=\"234\" \/><\/span><\/figure>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">KAMANN<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cOne significant key factor isn\u2019t just order-to-delivery, but more so which OEMs will have built flexibility into their manufacturing as it relates to supply chain challenges,\u201d said Jonathan Kamanns, associate director, fleet &amp; driver safety\/HR total rewards for Boehringer Ingelheim USA Corp. \u201cThe replacement schedule will largely remain unchanged. The lack of use of company vehicles and the lower miles during COVID is enabling us to endure extended replacement times from the supply chain constraints.\u201d<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Another factor constraining vehicle acquisition is staff shortages resulting in under-utilized fleet vehicles. \u201cWe are having difficulty attracting good staff members for open positions,\u201d said Stevenson of Essential Utilities.<\/span><\/p>\n<h2 style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Other Acquisition Factors<\/span><\/h2>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">As with any asset acquisition, there are a host of factors that need to be considered in calculating total cost of ownership.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cFactors that will influence our fleet budget for 2022-model-year ordering will be TCO, lifecycle and cap costs for vehicles, as always, along with vehicle availability and order-to-delivery timeframes,\u201d said Murray of Agfa Corporation.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">A very important factor will be future OEM pricing and incentives for 2022 models. \u201cThese two factors drive all acquisition decisions,\u201d said one fleet manager who wished to remain anonymous.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Another key factor fleet managers say will influence 2022-model acquisitions is fuel economy. The increase in fuel prices is causing some fleet managers to place a higher consideration on fuel efficiency when making the initial acquisition decision.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Also, the availability of safety equipment is an important factor. \u201cAdditional safety options\/packages that I can absorb within my specs can influence my 2022-model ordering,\u201d said Ricciardi of Mondelez International.<\/span><\/p>\n<h2 style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Extended Service Lives<\/span><\/h2>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Due to vehicle availability constraints in the 2021 model-year, most fleets have extended the service lives of vehicles that were scheduled for replacement. The consequence of this has been higher maintenance costs for wear items and increase the frequency of unscheduled repairs.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cThere is too much uncertainty right now with what will be available for 2022 so we are keeping all spare vehicles that are in good shape and seriously considering repairing the few that we would normally not repair,\u201d said Pawlisz of HR Green.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">In some cases, service lives have been extended so long that the vehicles must come out of service during 2022 ordering. \u201cOur vehicle replacement cycle was extended over 10 years ago. We should not extend further, and will order as usual,\u201d lamented one fleet manager.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">This concern was echoed by other fleet managers. \u201cWe have already extended our vehicle life beyond what we would normally have done. This is a result of the industry we are in and the challenges that we have faced in the past few years. So I cannot really extend our vehicle life beyond what we have already done without a significant rise in maintenance costs,\u201d said Fisher of National Oilwell Varco.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">However, immediate needs to put new hires into vehicles will dictate that the service lives of some vehicles be extended another year.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cVehicle availability is already a key factor for us in both extending life of older vehicles in the fleet and getting new vehicles to newly hired employees. What used to take three to four weeks now takes four to six weeks to find new vehicles. That, of course, increases the cost of rentals. In order to augment this situation, we have left in the fleet some older vehicles that were slotted for disposal. We are also moving vehicles from areas where they are not needed to areas where they are needed. Flexibility is the key to survival in this crazy environment,\u201d said Schreiber of Schindler.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">The need to extend vehicle services lives was brought up by many fleet managers. \u201cYes, we are fixing and retaining old vehicles that would have typically gone to auction. We do not have enough trucks to support our needs,\u201d said one fleet manager.<\/span><\/p>\n<figure class=\"article-img float-margin\" style=\"text-align: justify;\"><span style=\"color: #0000ff;\"><img loading=\"lazy\" class=\"wrapImageCMS alignleft\" src=\"https:\/\/fleetimages.bobitstudios.com\/upload\/global-fleet-management\/content\/article\/2021-07\/rachel-johnson-cafm-__-720x516-s.jpg\" alt=\"JOHNSON - \" width=\"331\" height=\"315\" \/><\/span><\/figure>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">JOHNSON<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Here\u2019s another example: \u201cWe had already begun to stretch our replacement cycles prior to the pandemic, but the constraints may cause us to keep them longer than originally planned. We\u2019ve really been trying to perfect our \u2018just-in-time\u2019 strategy and were making good strides at finding the sweet spot,\u201d said Rachel Johnson, CAFM, fleet specialist for Konecranes.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Sometimes vehicles are primarily kept in service to function as spares since out-of-stock orders from dealers are still difficult to procure.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cWe are having to keep vehicles longer in service due to the long lead times.\u00a0 We are also keeping some old spares that we would normally sell as out-of-stock units from the dealer,\u201d said a fleet manager.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">The low mileages incurred by fleet vehicles during the pandemic shutdowns allowed them to be held in service for another year, while attrition of some business units due to the pandemic is constraining the number of units that will be ordered in 2022.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cAgfa did extend some low-mileage vehicles that would have been replaced in the spring until the fall to prioritize higher mileage vehicle replacements.\u00a0 Those will be replaced in the next cycle for 2022 models,\u201d said Murray. \u201cThe Agfa fleet has been reduced due to attrition, with one business group re-aligning the job requirements for vehicles. That business group reduced by almost half, but another grew by approximately 20%.\u201d<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">In addition, the pandemic forced other companies to reassign salespeople to newly created virtual customer contact positions that do not need a company-provided vehicle.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cManagement\u2019s decision on reimagining positions to be more virtual will reduce the number of miles driven since the majority of this work is online, creating a situation where the employee no longer has sufficient business miles to qualify for a company-provided car,\u201d said a fleet manager.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Due to the success of transitioning some sales position to be online focused, many companies are looking to make these interim changes permanent. \u201cThe size of our fleet is expected to fall as we embrace different ways of working, primarily digital. This will be driven by the customer and their needs on how they would like to interact,\u201d said one fleet manager of a Top 100 fleet.<\/span><\/p>\n<h2 style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Impact of Increased Shortcycling<\/span><\/h2>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">One peripheral factor that could potentially influence new-vehicle orders for the 2022 is whether more fleets are tempted to shortcycle vehicles to take advantage of the higher resale values. This, in turn, would necessitate additional orders for replacement vehicles. This has proven advantageous for those companies looking to downsize their fleets and do not need replacement vehicles. But the overwhelming majority of fleet managers are hesitant to shortcycle because they are concerned they may be unable to get replacement vehicle in a timely basis. \u00a0For instance, when company drivers quit or are terminated, fleets have two choices \u2013 cash in on the hot resale market by selling the vehicle at auction at a premium or to put the vehicle in storage to guarantee the availability of a replacement unit when needed for a new employee. The large majority of fleets are playing it safe and storing units so they are readily available when new-hires are brought onboard and are willing to forego the allure of higher resale values at auction. However, everything is relative. \u201cI try to stay true to our replacement parameters per our auto policy; however, I might lean in, if the used-vehicle market stays positive and lucrative,\u201d said Ricciardi of Mondelez International.<\/span><\/p>\n<figure class=\"article-img float-margin\" style=\"text-align: justify;\"><span style=\"color: #0000ff;\"><img loading=\"lazy\" class=\"wrapImageCMS alignleft\" src=\"https:\/\/fleetimages.bobitstudios.com\/upload\/global-fleet-management\/content\/article\/2021-07\/clay-gaudet-__-720x516-s.jpg\" alt=\"GAUDET - \" width=\"190\" height=\"294\" \/><\/span><\/figure>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">GAUDET<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Today, all fleets are experiencing dramatic increases in resale values for out-of-service fleet vehicles in the wholesale market. \u201cWe have seen a dramatic lift in the resale value of our vehicles when sold on the secondary market,\u201d said Leuenberger of Cox Enterprises.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Other fleets are likewise experiencing dramatic increases in the resale value of out-of-service fleet vehicles. \u201cOur gains at auction right now have reached levels we never thought possible, record breaking,\u201d said Clay Gaudet, senior global fleet manager for AutoZone.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Resale prices have been especially strong for vocational vehicles. \u201cIt is nearly impossible to get cargo vans. We are seeing incredible resale numbers on the few used vehicles we are selling,\u201d said Jeff Hill, manager, construction equipment &amp; fleet services for Black &amp; Veatch Corp.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Here\u2019s one example of a fleet that benefitted from shortcycling.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cResales are incredible, so we got lucky when we decided to replace most of our sales fleet this year and got our orders in by mid-January. Fuel cost increases are a concern, especially for next year when we won\u2019t be able to offset with all the large resale gains. I have been selling some of my 2019 vehicles for more than I bought them for originally \u2013 zero depreciation! If resale values hold, then I will likely replace all of my 2020-MY vehicles next year, which only represents about 25% of my fleet,\u201d said the fleet manager who asked to be anonymous.<\/span><\/p>\n<p>&nbsp;<\/p>\n<figure class=\"article-img float-margin\" style=\"text-align: justify;\"><span style=\"color: #0000ff;\"><img loading=\"lazy\" class=\"wrapImageCMS alignleft\" src=\"https:\/\/fleetimages.bobitstudios.com\/upload\/global-fleet-management\/content\/article\/2021-07\/jeff-hill-__-720x516-s.jpg\" alt=\"HILL - \" width=\"213\" height=\"311\" \/><\/span><\/figure>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">HILL<\/span><\/p>\n<h2 style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Concern about Cost Increases<\/span><\/h2>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">A growing number of fleet managers anticipate that fleet costs will increase.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cI foresee a 5%-10% uptick on fleet expenses for 2021 and 2022,\u201d said Schreiber of Schindler.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cThe biggest factor in acquisitions will be OEM incentives offered for 2022 models and our concern that they will be greatly reduced. However, we are primarily a truck fleet and may be able to make up that difference in resale this year. So currently we think the reduced incentives will not be a significant budgetary factor,\u201d said one fleet manager.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Another concern is the upward pressure on fleet costs due to a variety of factors such as higher commodity prices, labor costs, and parts shortages, in particular the microchip shortage.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cNot only are we having a hard time obtaining vehicles, but we\u2019re having a hard time fixing accident-damaged vehicles, especially obtaining replacement parts that include semiconductor components \u2013 this is a big issue,\u201d said one fleet manager.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">This was echoed by another fleet manager. \u00a0\u201cThere is a shortage of parts for everything. We can\u2019t get parts for generators installed in our mobile labs or A\/C parts (RV-type).\u00a0 Catalytic converters are stolen every week\u2014something needs to be done. I\u2019m not a fan of government regulations, but we need something,\u201d said one fleet manager.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Another surveyed fleet also cited the ongoing parts shortage. \u201cAftermarket parts shortages will also be an issue in MY-2022 \u2013 we are currently working with our upfitters to lock in pricing and obtaining and inventorying the parts we believe we will need in MY-2022,\u201d said one fleet manager who likewise wished to be anonymous.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cI believe there are currently more variables than normal impacting costs, as well as the acquisition of new vehicles.\u00a0 In addition to the ongoing chip shortages, short-term gas shortage, labor shortage, and the ongoing pandemic, I believe we may see additional impacts to the supply chain such as rubber, additional fuel shortages, and power distribution in some markets. Also, I am sure there will be other challenges that arise from areas we have not anticipated,\u201d said Leuenberger of Cox Enterprises.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Another concern expressed by fleet managers is the sunsetting of the 3G network by Verizon on Dec. 31, 2022. On this date, Verizon will officially shut down its 3G network, which will end its service to all 3G devices starting in 2023. Fleets that don\u2019t make the switch to 4G or 5G devices before the cutoff date won\u2019t be able to rely on their existing 3G devices.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cEveryone is worried and concerned about the availability and pricing of vehicles. We have telematics installed in all of our vehicles. We are very concerned with the sunsetting of 3G as we will need to replace many old telematics devices. Those devices are also constrained due to parts shortages,\u201d said one fleet manager.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">While 2021 has been a challenging year, the hope is that there is a return to normality in calendar-year 2022.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cWell, this is by far the most challenging year or two. We have had the one-two punch with COVID-19 hitting first and the mess that we have now, with an end maybe in 2022. Fleet managers should be even more valued for navigating the fleets they manage through these crazy times. They definitively have earned their keep,\u201d said Schreiber of Schindler.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u00a0 While there are a number of stories about cancelled or delayed orders, for the most part the OEMs have done a superb job in the wake of the microchip storage in producing vehicles for fleets.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cSo far, our OEM has been able to deliver vehicles that have been ordered and I expect this to continue as I replace my fleet cars per our parameters,\u201d said Murray of Agfa Corporation.\u00a0<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">Nevertheless, these are tumultuous \u00a0times in the history of fleet management.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cAlthough this is not related to my company, I\u2019m concerned the U.S. domestic OEMs may lose share to other OEMs as they seem to be impacted to a greater extent than some other OEM due to the fact they were focused on making PPE, whilst others were just idle and maybe even planning during that time about their future business. The U.S. domestic OEMs should be commended for their efforts related to PPE and as an industry we should understand their situation and strive to be good partners, particularly if they have served us well in the past versus casting them aside for others who were just sitting idle during the shutdown,\u201d said one anonymous fleet manager.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u00a0For multinational companies, there is a broader transformation occurring beyond electrification to mobility management.<\/span><\/p>\n<figure class=\"article-img float-margin\" style=\"text-align: justify;\"><span style=\"color: #0000ff;\"><img loading=\"lazy\" class=\"wrapImageCMS alignleft\" src=\"https:\/\/fleetimages.bobitstudios.com\/upload\/global-fleet-management\/content\/article\/2021-07\/pim-de-weerd-__-720x516-s.jpg\" alt=\"DE WEERD - \" width=\"258\" height=\"258\" \/><\/span><\/figure>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">DE WEERD<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u00a0\u201cWe are transforming from \u2018fleet\u2019 to \u2018mobility management\u2019 in order to provide our workforce more flexibility, increase sustainability, and to manage our total cost of mobility more efficiently,\u201d said Pim de Weerd, global commodity manager mobility for Philips.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">One closing observations was made by a fleet manager reflecting on the current state of the fleet industry in relation to her company and fleet.\u00a0<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #0000ff;\">\u201cThings hardly seem the same as one to two years ago. I\u2019m not sure we will ever get back to where fleet once was.\u201d<\/span><\/p>\n<p>&nbsp;<\/p>\n<p class=\"original-url\">Originally posted on <a href=\"https:\/\/www.globalfleetmanagement.com\/10147944\/strong-buying-inclinations-for-fleet-vehicles-in-2022\">Global Fleet Management<\/a><\/p>\n<p>by <a href=\"https:\/\/www.automotive-fleet.com\/authors\/3316\/mike-antich\">Mike Antich<\/a><\/p>\n<p><span class=\"posted-by\">Source: <a href=\"https:\/\/www.automotive-fleet.com\" target=\"_blank\" rel=\"noopener noreferrer\">https:\/\/www.automotive-fleet.com<\/a><\/span><\/p>\n<div class=\"g-cols wpb_row type_default valign_top vc_inner vc_custom_1585038969469\">\n<div class=\"vc_col-sm-12 wpb_column vc_column_container\">\n<div class=\"vc_column-inner\">\n<div class=\"wpb_wrapper\">\n<div class=\"w-post-elm post_content\">\n<div class=\"g-cols wpb_row type_default valign_top vc_inner vc_custom_1585038969469\">\n<div class=\"vc_col-sm-12 wpb_column vc_column_container\">\n<div 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wpb_column vc_column_container\">\n<div class=\"vc_column-inner\">\n<div class=\"wpb_wrapper\">\n<div class=\"w-post-elm post_content\">\n<h1 style=\"text-align: center;\"><a href=\"https:\/\/advancedfleetmanagementconsulting.com\/eng\/who-we-are\/\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>KNOW WHO WE ARE<\/strong><\/a><\/h1>\n<p><a href=\"https:\/\/advancedfleetmanagementconsulting.com\/eng\/who-we-are\/\"><img loading=\"lazy\" class=\"aligncenter wp-image-11695\" src=\"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-content\/uploads\/sites\/3\/2021\/07\/AFMC4000-300x150.jpg\" sizes=\"(max-width: 430px) 100vw, 430px\" srcset=\"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-content\/uploads\/sites\/3\/2021\/07\/AFMC4000-300x150.jpg 300w, https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-content\/uploads\/sites\/3\/2021\/07\/AFMC4000-1024x512.jpg 1024w, https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-content\/uploads\/sites\/3\/2021\/07\/AFMC4000-1536x768.jpg 1536w, https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-content\/uploads\/sites\/3\/2021\/07\/AFMC4000-2048x1024.jpg 2048w\" alt=\"\" width=\"430\" height=\"215\" \/><\/a><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Credit: Gettyimages Most commercial fleets plan to order more vehicles in the 2022 model-year than last year, but almost all qualified the forecast by saying \u201cIf\u2026\u201d Here\u2019s an example: \u201cWe will be ordering more vehicles in MY-2022 if (and that\u2019s the big \u2018if\u2019) the OEMs can deliver them when needed,\u201d said one fleet manager who&#8230;<\/p>\n","protected":false},"author":3,"featured_media":12055,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[332],"_links":{"self":[{"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/posts\/12054"}],"collection":[{"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/comments?post=12054"}],"version-history":[{"count":4,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/posts\/12054\/revisions"}],"predecessor-version":[{"id":12060,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/posts\/12054\/revisions\/12060"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/media\/12055"}],"wp:attachment":[{"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/media?parent=12054"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/categories?post=12054"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/tags?post=12054"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}