Fleet Vehicle Selection: Evolving With the Market
Although the basic process is the same, the criteria, options, and driver needs for the selection of fleet vehicles have evolved over the years. Where the industry was, is, and will be is an interesting story.
The foundation of any fleet operation lies in the vehicles it chooses. Vehicle selection impacts every aspect of vehicle cost, from license and title to depreciation to insurance. The ability of drivers to carry out their mission — to bring products and services to customers — and fleet managers to track and control expense are all ultimately functions of the vehicles a company chooses to place into service.
The overall process of vehicle selection hasn’t changed much over the years. Fleet managers determine what job vehicles do, what vehicles might qualify, how to equip them, what they can expect each potential vehicle’s costs to be, and, ultimately, which vehicles are to be used.
What has evolved, and dramatically so, are the vehicles themselves, the technology and equipment they offer, and even what drivers need to do their jobs. So, too, has the pressure on fleet managers to take full advantage of that technology and equipment.
Where We’ve Been
People often speak wistfully of “simpler times.” This nostalgia can also arise when veteran fleet managers get together; believing it was so much simpler back then, when there were only three domestic manufacturers to choose from, fewer models, and less equipment to consider. To some extent, this was true.
Forty years ago, there were, indeed, only three domestic manufacturers to choose from. Most fleets used full-sized eight-cylinder, four-door sedans. Most of even the basic equipment we take for granted today — power windows, door locks, air conditioning, even radios — were optional. It was not uncommon then for fleet managers to consult a map to decide which vehicles got air conditioning or didn’t. An automatic transmission wasn’t, well, automatic. There were, of course, a number of things that made the vehicle selection process simpler decades ago. The new model-year began in September (October at the latest), and ended in April or May. Build-out dates were firm, and there were no “1971½” models introduced mid-year.
That said, this simplicity didn’t make the ultimate goal any different. Fleet managers still had to decide what equipment was necessary, what wasn’t, and how to spec fleet vehicles. They were still responsible for selecting vehicles that would provide drivers with the safest, most cost-efficient transportation available. They had to consult pricing guides, which, by the way, took the form of thick spec books, not point-and-click online tools, and the use of adding machines (and sometimes primitive calculators) to conduct comparisons, sensitivity analyses, and total everything up. So, then, was it really easier in 1971? When all is said and done, it wasn’t. It was just different. The new technology of the ’70s was fuel injection and electronic ignition. It was vehicle-centric, more geared toward making vehicles more efficient, or powerful, or both. That has changed.
Where We Are Today
The auto industry has undergone some remarkable changes in the ensuing 40 years: two of the original “Big Three” have undergone managed bankruptcies (one of these having been previously acquired by a European automaker), Asian companies have made slow but steady inroads into the fleet market, and the emergence of a European presence is now being felt.
A number of makes and models have come and gone, with stalwart nameplates such as Oldsmobile, Pontiac, and Plymouth now a part of automotive history. Two “oil shocks” in the 1970s have brought fuel efficiency to the forefront of vehicle selection criteria. Alternative-fuel vehicles have proliferated, as technology continues its inexorable advance.
Today, fleet managers have a dizzying array of choices to review and analyze. Literally dozens of makes and models, equipment options, engine and drivetrain combinations make vehicle selection today both exciting and often confusing. “Domestic” has become a flexible term, as U.S.-based manufacturers source parts and assemblies overseas, and import automakers have plants dotting the country.
One of the more intriguing changes in the selection process, however, lies in those technological advances. While there are many such advances in vehicle technology, many still are driver related. It is these new technologies that have become a challenge for fleet managers. Whether convenience or safety related, the technology available today is well beyond the wildest dreams of fleet managers (and drivers) of years past:
- Engine technology: There are new engine technologies that can boost fuel efficiency without sacrificing power.
- Connectivity: Drivers are more connected with the outside world, via GPS, built-in Bluetooth capability, and other technology.
- Materials: New, high-impact, lightweight materials make vehicles lighter and stronger.
- Auto-parking: Drivers can avoid the activity that sends chills down the spines of high school students everywhere — parallel parking. New technology allows some cars to park themselves automatically.
- Alternative fuels: From E-85 ethanol to liquefied natural gas (LNG) to electricity to hybrid systems, alternative-fuel and drive systems are powering more vehicles than ever.
These and many other new technologies can make vehicles and driving safer, more cost efficient, and more comfortable than ever before.
Though that sounds like it would make a fleet manager’s selection job simpler, it doesn’t. Keep in mind the basic criteria for selection:
- Fits the mission.
- Lifecycle costs (depreciation plus operating costs).
- Availability (order-to-delivery).
The proliferation of technology, both driver and vehicle-centric, creates challenges for fleet managers today. Although all this new technology helps make both vehicles and drivers more productive, there are costs that must be considered.
Adding new features, especially high-tech features, will inevitably increase the original cost of the vehicle, half of the depreciation equation. Doing so, either as standard or optional equipment, requires that it has a positive effect on the ultimate resale value when the vehicle is sold (the other half of the depreciation equation).
The first part of the equation is predictable; the second isn’t. It is very difficult to project the resale value of new vehicle features, particularly in a world where technology advances so quickly. What is new and exciting today may be old news in two years when the vehicle is resold. This is much different than in the past, when resale values were far more predictable.
Next, there is the question of whether these new features will perform as advertised; it often takes more than one model-year to “get the bugs out” of new technology. Those same fleet managers from the 1970s can relate stories of then-new technology, such as transverse engine and front-wheel drive, which was rushed out to meet the 1979 gas shortages before they had been perfected.
Finally, there is also the question of whether any particular technology in consideration — if it is driver-centric — will act as a distraction. This is particularly true of two relatively recent developments in vehicle tech: Bluetooth and GPS. Fleet managers must try to balance the benefits — both can be substantial boons to productivity — against the safety and privacy issues that can arise. Will using built-in Bluetooth capability run contrary to a corporate policy banning the use of cell phones while driving? Will GPS, even with verbal instructions, cause drivers to be distracted from their primary activity, driving a ton of metal at highway speeds? What about drivers, and their managers, who press for such driver conveniences, rightfully seeing them as wonderful productivity tools?
These and other questions force fleet managers into a decision-making process that just wasn’t necessary in the not-too-distant past.
In the end, the selection process has evolved from a relatively simple decision (albeit made using tools that were primitive by today’s standards) to one that must take into consideration the remarkable technology available, its cost, and pressure from driver stakeholders to use it, and balance that with a cold economic policy and safety analysis that might not give drivers what they want.