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The future of the fleet dealer seems hazy. Profits are down, volume is down, customer base is down, and the personal connections that used to be a large part of the business have mostly been replaced with texts on a screen and the phone calls needed to get the job done <\/em>Photo courtesy of Getty Images.<\/em><\/p>\n As the fleet industry has changed, so too has the role of the fleet dealer.<\/p>\n What used to be an industry full of fleet dealers spread out across the country, selling vehicles to numerous fleet lease companies and commercial accounts, has been reduced to a handful who operate nationwide.<\/p>\n Similarly, dozens of fleet lease companies used to operate nationwide, and whenever they needed to purchase a vehicle, they would do it through a fleet dealer. Through the years, larger fleet lease companies have acquired smaller ones, and the number of fleet lease companies operating today is vastly fewer.<\/p>\n Fleet dealers today primarily sell to local lease companies and local company-owned fleets. Courtesy deliveries are also a larger part of a fleet dealer\u2019s business than it used to be.<\/p>\n Based on the opinions of fleet dealers interviewed for this story, the future of the fleet dealer seems hazy. Profits are down, volume is down, customer base is down, and the personal connections that used to be a large part of the business have mostly been replaced with texts on a screen and the phone calls needed to get the job done.<\/p>\n While the future of the role is somewhat dim, the picture that fleet dealers paint of the role\u2019s past is quite bright.<\/p>\n The 1970s and 1980s were high points for the profession, noted Ray Sarbiewski, the previous director of fleet sales for Grossinger\u2019s Autoplex who retired in February 2018 after a more-than 40-year career in the industry.<\/p>\n In those days, fleet dealers had huge expense accounts for entertainment and three-hour lunches were not out of the ordinary, he recalled. Of course, at the time, fleet dealers also saw profits that allowed for this routine, he added.<\/p>\n Customer service and building relationships were just as important as profits during this period, he noted.<\/p>\n Related:\u00a0[1977] AF’s Fleet Dealer of the Year Awards<\/a><\/p>\n \u201cIn those days, it wasn\u2019t always about the best price,\u201d said Sarbiewski. \u201cA lot of companies we served enjoyed being taken care of. That\u2019s not the case anymore, every dollar makes a difference.\u201d<\/p>\n In the 1970s and 1980s, online ordering was still decades away from entering the business, and every facet of the business was done through physical paperwork. Waiting days for the U.S. Postal Service to deliver paperwork to all parties involved was also par for the course.<\/p>\n Fleet management companies had not yet emerged on the scene, just dozens of fleet lease companies that needed fleet dealers to purchase vehicles, said Rick Nicoletti, vice president and general manager of the Napleton Fleet Group.<\/p>\n The practice of drop-shipping vehicles \u2014 where vehicles are factory-ordered from a manufacturers and sent to a dealership near the customer for pickup \u2014 was also just starting out.<\/p>\n In the 1980s a big change came to the industry in the form of secondary dealer codes. The bigger fleet leasing companies were able to get a hold of these codes from dealers, and with these codes they were able to order direct from the OEM and drop-ship their own vehicles. This essentially allowed them to circumvent the fleet dealer.<\/p>\n As the use of secondary codes continued to grow, fleet dealer\u2019s out-of-stock sales fell.<\/p>\n Normally, if a fleet leasing company needed a car immediately that was out of stock, then this unit would be purchased from a dealer\u2019s existing inventory.<\/p>\n Through the use of a secondary code from a dealer, fleet leasing companies were able to, on a per-car basis, order a vehicle straight from the manufacturer. The FMC would order the vehicle themselves, call the drop-ship dealer themselves, and handle all the paperwork, pretty much everything a fleet dealer would normally do.<\/p>\n \u201cThis was a major change in how fleet dealers were selling to lease companies \u2014 the fleet dealer was no longer ordering the vehicle,\u201d said Nicoletti. \u201cThe ordering, drop shipment, and all the paperwork was handled by the lease company with a very small fee per vehicle paid to the dealer.\u201d<\/p>\n The price difference between a fleet dealer ordering the vehicle, and a fleet leasing company ordering a vehicle with a secondary code was substantial.<\/p>\n By the second half of the 1980s the larger fleet lease companies began to accelerate the rate at which they were acquiring smaller fleet lease companies. By the early 1990s that rate accelerated further, which led to the large fleet management companies that are around today.<\/p>\n For a fleet dealer looking to sell a vehicle to a company, everything starts with getting to know the fleet manager of the company he or she wants to sell to, noted Rick Nicoletti, vice president and general manager of Napleton Fleet Group.<\/p>\n The company is most likely a local business, as larger businesses often times have a contract with one of the large fleet management or leasing companies.<\/p>\n Once a fleet dealer gets to know a fleet manager, he or she will talk about what his or her company can offer the fleet manager. If the fleet manager likes the offer, then the two can begin to propose a pricing structure.<\/p>\n Sometimes the price gets shut out right away, other times a few rounds of negotiations are needed to reach an agreeable price.<\/p>\n Once the price has been set and hands have been shook, the next step is for the fleet dealer to make the vehicle order with the manufacturer. The invoice, and MSO (manufacturer statement of origin) are sent to the fleet dealer.<\/p>\n In-house, the fleet dealer processes the paperwork to show that it\u2019s the car he or she ordered. The dealer bills the fleet customer and expects payment ASAP. Normally, not more than 10 days, noted Sarbiewski.<\/p>\n Some of this paperwork goes to the dealership that will be delivering the vehicle and the rest goes to the driver that will ultimately receive the vehicle. The fleet dealer is in constant communication with all parties involved in order to keep everyone apprised of the vehicle\u2019s status, according to Nicoletti.<\/p>\n The dealership that will be delivering the vehicle typically has someone assigned to handle this paperwork and the process involved in delivering a fleet vehicle.<\/p>\n That assigned person will receive the paperwork from the fleet dealer and will see if the information in the paperwork matches with the fleet vehicle they\u2019ll be delivering. The delivering dealership will then setup an appointment with the driver, to come pick up the car. The dealership will then handle licensing and titling for the vehicle and will then charge the fleet dealer for the cost of them. \u00a0The delivering dealership should not be out any money for handling the licensing, titling, or delivery of the vehicle.<\/p>\n The fleet dealer then bills the vehicle to the customer and gets paid. Everyone gets somewhere between a week to 10 days to pay.<\/p>\n Other factors, apart from secondary codes, have also impacted the fleet dealers business.<\/p>\n As the years have gone by, manufacturers have ramped up the amount of popular vehicles that they pre-build. Vehicles that sell well are produced in popular configurations and are set aside as an immediate fleet of ready-to-sell vehicles.<\/p>\n This further reduces the chance that a vehicle is out of stock for a fleet management company, which in turn hurts fleet dealers\u2019 out-of-stock sales.<\/p>\n Order-to-delivery times have also improved through the years. In the instances where a manufacturer may not have a vehicle that a fleet management company needs, it doesn\u2019t take too long to build and deliver it.<\/p>\n In many instances, the factory order wait time has gotten to a tolerable enough point where a fleet management company ordering a vehicle will put their driver in a rental car in the interim while the vehicle is delivered.<\/p>\n In the early 2000\u2019s buying online was available, but it wasn\u2019t as fast or as convenient as it is today. The majority of paperwork was still being faxed at this time.<\/p>\n As time went on, online ordering improved, and the flow of paperwork and accounting also got better.<\/p>\n From a manufacturer standpoint, dealership education on fleet purchases also improved. Before, the fleet managers at the dealerships needed to explain to the dealership owners exactly what they needed to do and how they were going to get paid.<\/p>\n Now, field reps from manufacturers go out to dealers to explain and ask if they want to be part of a courtesy delivery program. Manufacturers have really helped in this respect.<\/p>\n Technology brought many changes to the fleet dealer business. Email replaced paper purchase orders and the paperwork that used to take days to send and receive were transmitted in an instant.<\/p>\n One thing that has remained is phone calls. Phone calls are necessary for certain aspects of the job, but they also help keep some of the human factor in a business that has been shedding that part of itself through the years.<\/p>\n Sarbiewski described the job of a fleet dealer today \u2014 compared to that in the 1970s and 1980s \u2014 as sterile.<\/p>\n \u201cWhen you go back to the early years, there was a lot more personal contact that made relationships stronger, you went out and saw people,\u201d said Sarbiewski. \u201cNow, you know that there is going to be an email or phone call coming, you talk for a few minutes, they ask what your best deal is, and you get it over with.\u201d<\/p>\n When asked on how what his view was of the future of the fleet dealer, Sarbiewski described a hazy picture.<\/p>\n \u201cI think there will be fewer people involved,\u201d said Sarbiewski. There\u2019s so much that a dealer doesn\u2019t need to do anymore because the FMCs are so big. With autonomous cars, some people won\u2019t even be buying cars anymore, they\u2019ll be buying a service, the whole future is up in the air and I\u2019m excited to see what happens, but I\u2019m glad I won\u2019t be [in the industry] for it.\u201d<\/p>\n Nicoletti felt that the future of the fleet dealer may be intertwined with the future of the automotive industry as a whole.<\/p>\n \u201cIt depends on what happens to dealers,\u201d said Nicoletti. \u201cIf the traditional dealer model for retail sales continues, there will continue to be a need for dealers to sell fleet or commercial. If the retail sale, lease or subscription model changes, it will impact how dealers sell fleet.\u201d<\/p>\n by Eric Gandarilla<\/a><\/p>\n Source: https:\/\/www.automotive-fleet.com\/<\/a><\/p>\n Fleet management is the use of a set of vehicles in order to provide services to a third-party, or to perform a task for our organization, in the most efficient and productive manner with a determined level of service and cost.<\/p>\n Fleet management activities are shown in the following graph 1:<\/p>\n Graph 1: fleet management activities<\/p>\n The proposal audit analyses and assesses all fleet management activities shown in the graph 1, and its main goals are:<\/p>\n With the information obtained, we\u2019ll elaborate a report that holds the overall status of the fleet management as well as the suggestions, recommendations and the measures to take in order to cut costs and optimize the fleet management activities.<\/p>\n CLICK ON THE FOLLOWING LINK TO DOWNLOAD THE PROPOSED FLEET MANAGEMENT AUDIT:<\/p>\n Contact:<\/p>\n Jos\u00e9 Miguel Fern\u00e1ndez G\u00f3mez<\/p>\n 34 678254874<\/p>\n info@advancedfleetmanagementconsulting.com<\/p>\nEvolution of the Fleet Dealer<\/h1>\n
The History of Fleet Dealers<\/h2>\n
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\nThe Fleet Dealer Process<\/h2>\n
\nChanges to the Business Strategy<\/h2>\n
\nThe Outlook for the Industry<\/h2>\n
FLEET MANAGEMENT AUDIT<\/h3>\n
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Fleet Management Audit AFMC<\/span><\/a><\/h2>\n
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I\u00b4m\u00a0a Fleet Management expert, and the manager of\u00a0