2014 Fleet Industry Report Card: OEM Focus
In the second part of this year's fleet industry report card, fleet managers give their feedback about what OEMs are doing right and where they have room for improvement.
Photo courtesy of iStockPhoto.com.
This annual survey, now in its second year, is designed to provide an industry "report card" of the services and products offered in the commercial fleet management market by fleet management companies (FMCs), automakers, and upfitters. As was revealed in last year's survey, fleet managers are mostly satisfied with the products and services available to them; this sentiment was validated once again with the 2014 survey.
This year, the survey has been broken into two parts. Part one rates how the FMCs are serving their fleet customers. Part two examines how fleet managers view their OEM suppliers. In addition, there are two sidebars. The first sidebar examines the successes and challenges fleet managers are having with their senior management. The second is an upfitter report card (pick up the print issue for this).
Below are suggestions from fleet managers — in their own words — on how FMCs can improve the services offered to them. Responses have been kept anonymous so as not to identify specific OEMs, FMCs, or upfitters.
Fleet managers surveyed for this year's report card, overall, gave the OEMs high marks in a number of areas, including:
- Vehicle quality.
- Field account representation.
- Ease of factory ordering.
However, in the spirit of helping the industry, fleet managers also identified areas where improvements can be made in OEM products and services. See below.
OEMs Need to Provide More Fleet-Specific Options
"Over the past few years, we have seen the lack of 'fleet only' options. Fleets ordering more than 'X' amount of vehicles should have specific included options required by fleet vehicles. The more you purchase, the better option should be included, which will raise the ROI at auction. A fleet that buys 1,000 vehicles per year should receive more included options that a fleet buying 50 vehicles. Too often, we are seeing CAPs close to being the same no matter the volume.
"Provide fleet customers more industry specific options. An example is providing a wider range of tires suitable for off-road applications in the oil and gas industry."
Dealers Need to Do a Better Job at Courtesy Deliveries
"Once again, I think there is a huge lack of service when it comes to drop-ship/courtesy deliveries. Many dealerships look at these deliveries as a 'waste of time/resources for the money.' Many dealerships don't do these deliveries for that reason. (I have heard this from quite a few dealerships.)
"In my eyes, this is a perfect opportunity for a dealership to gain the trust and business from an individual for life, and not just with company-purchased fleet vehicles. Even though the delivery dollars may not be a huge amount for a dealership, the possibility of future vehicle purchases and maintenance/service should be a big incentive for the dealership to provide exemplary service. I wish the manufacturers would put more emphasis on this and require it for all dealerships that sell their make.
"Another positive would be manufacturers coming to dealerships to train the people in charge so there is some uniformity and not every dealership doing it differently.
"There needs to be improvement in vehicle delivery status and the delivering dealer network. None of the 'Big Three' have any sort of courtesy delivery program incentives for the delivering dealer that would directly assist the selling dealer."
OEMs Need to Improve Quality Control
"Increase quality control measures over your OEM parts suppliers as well as the designers of parts. Millions of cars being recalled with some very serious consequences does not help build your business case!"
Synchronize New-Model Offerings and Launches
"Manufacturer fleet divisions need to bring the message to their leadership to help our industry with synchronization of model-year introductions and coordination of pricing announcements with incentive packages. Try to explain the pain 'in between model-year' cutoffs and startups create in our industry. (Nothing is more frustrating than setting up your selector for a model-year and having a key product disappear halfway through.) Very difficult to explain to the end-user, our drivers.
"Additionally, manufacturers need to appreciate the fleet business and be completely transparent to the fleet industry. Be forthcoming and honest with production issues. When we attend product previews, we want honest answers to nagging problems that we all are aware of (not to have them ignore speaking about the challenges openly). To their credit, some do this."
"The biggest area of improvement that I see is in the area of communications. Calendar-years 2012/2013 were the years of surprises — recalls, early cut-offs, challenges in supply chain operations, upcoming changes in manufacturing materials, etc.
"Communication is an industry-wide issue. Clients call in and mostly get voicemail or a client services rep that has no personal contact with the client. There is no immediate help in most cases. You are lucky to get a call back in 24 hours or more."
Poor Data Management
"The most pressing problem I deal with is that my vendors fail to meet my expectations in data management. Keeping up with IT enhancements and upgrades is essential to staying competitive and ensuring your client has the most effective and efficient tools to perform their day-to-day activities. This includes accurate reporting tools, automation, and collection of information so a fleet manager can access it immediately electronically."
Better Treatment for Smaller Fleets
"I would say an issue is not treating the small fleets and the big fleets the same. It's obvious that, as a smaller fleet, you sometimes get ignored on issues and resolutions."
Import-Badged OEM Nameplates Need to Improve OTD
"This is directed more to the 'foreign nameplate' manufacturers, as the Detroit Three already handle this area really well. The foreign nameplates really need to work on training their dealerships in how to handle fleet deliveries, and press the importance of speed in processing documents for delivery, ensuring the driver is comfortable with the operation of their new car. The dealers also need to be trained in the service area so they understand the tight time frames fleets work under and that fleets cannot wait a week or more for an appointment just for a diagnosis and then wait longer for a possible repair."
Quality Slipping Among Heavy-Truck OEMs
"Recently, the quality control in the heavy-duty asset arena is increasingly becoming very poor. It appears that companies are abandoning their traditional R&D modeling approach to test technology in advance by accumulating a million miles. Rather, they quickly release inferior quality to their customers to deal with, which severely impacts customer service and causes additional or unnecessary peripheral or indirect costs. It appears the companies are more desirous to get new products to the market quickly to capture the customer base versus produce a quality product.
"Heavy-duty asset quality control is a huge issue along with the compounding costs of new technology being added to fleet purchases and total life costs. We constantly have to explain to leadership that the costs related to these assets is more related to environmental and technological advances than standard year-over-year repair and standard maintenance costs. Cost and complexity are becoming a huge issue that is plaguing fleet budgets and OEMs need to partner with fleets to help explain why these costs continually increase and how much. As an example, since 2007, if you press a heavy-duty OEM, they will admit that the emissions controls have added about 30 percent to the cost of a new truck on acquisition and perhaps more throughout the total lifecycle."
Faster OTD is Needed for Upfitted Units
"There is a need to increase the speed of delivery from the factory to the dealer when an upfit is involved. Even the most minor of upfits (applying decals) will add at least two-three weeks to the delivery of a vehicle."
OEMs Need to Continue to Improve Fuel Economy
"I would like to see a continued and accelerated focus on fuel economy. I also hope for a change from the current paradigm of volume rebates to a more collaborative risk/reward sharing scenario, although I honestly don't know how it could be structured."
OEMs Need to Do a Better Job in Standardization
"The auto manufacturers need to have more standardization when they release new vehicles for fleet, when they build-out for fleet, and when they put out their pricing for fleet. They continue to show us that, although we easily represent 25 percent or more of their business, we are not of great importance in the overall scheme of their business."
OEMs Should Consider Offering Loyalty Incentives
"Auto manufacturers need to value loyalty in purchasing patterns and work harder to keep customers by providing loyalty incentives."
Expand AWD Offerings
"We have an issue with finding very fuel-efficient AWD vehicles for Snow Belt climates."
Better National Account Discounts
"Improvements are needed in controlling customers' maintenance spend by negotiating better national account volume discounts, especially in the area of tires."
Balancing CAFE Requirements to Meet Large Vehicle Needs
"OEMs must keep in mind when seeking to meet future CAFE requirements that they still need to provide fleets with trucks, SUVs, and other large vehicles needed to accomplish fleet objectives at many corporations. The use of lightweight materials and revised powertrains are two methods for addressing this matter."
OEMs Need to Do a Better Job with Updates
"The fleet community should have an inside track to the manufacturers' updates equal to or more robust than the FMCs."
2014 Fleet Industry Report Card: FMC Focus
2014 Fleet Industry Report Card: Senior Management