Car OTD Times Static, Truck OTD Improves
Although order-to-delivery (OTD) times remained relatively static in MY-2013, there were notable improvements, especially among light-duty trucks and SUVs.
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Order-to-delivery (OTD) times for the 2013 model-year remained relatively stable when compared to MY-2012; however, there were notable improvements, especially among light-duty trucks and SUVs.
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While OTD remained relatively static overall, year-over-year, delivery times were still above the industry average benchmark of 60 days.
“Certain individual models experienced notable increases or reductions in OTD timing in 2013, but average overall OTD times, across all models, did not change significantly from 2012. In both years, overall averages were above the 60-day industry accepted standard,” said Jan Freund, director, manufacturer relations for Wheels Inc.
The key reasons for some OTD delays in 2013 were due to OEM quality holds and transporter-related issues.
“Rather than forces outside our industry delaying order-to-delivery times, we found the top influencers to be within the manufacturer and transportation companies themselves,” said Tim McHugh, vice president, supply chain & compliance for ARI. “These included supplier commodity constraints, quality assurance/quality holds, recalls, assembly plant downtime, and railcar shortages.”
Other factors impacting 2013-MY OTD included:
- Weather-related delays.
- Production backlog and delays with upfitters, who were working at capacity.
- Lack of timely delivery processing by some dealers.
- Higher overall vehicle replacement volume, due to increased industry demand for the commercial truck and van segment.
One of the biggest issues impacting OTD was the improved national business climate.
“Overall, there were increased vehicle volumes due to the continued industry growth rate,” said Brad Vliek, VP, client solutions for Emkay.
The increased industry order volume was up across the board, but the increased volume in some vehicle segments were more pronounced than others.
“There was a higher overall replacement volume, especially increased demand for the commercial truck and van segments,” said George Kokos, manager, new vehicle acquisition for PHH Arval.
The impact on OTD by increased industry order volume was also cited by Wheels.
“In an effort to ensure improved supply, the Detroit manufacturers reduced their annual two-week summer shutdown at dozens of plants that produce the most popular models. Ford halved production at about 20 North American plants and nearly all of Chrysler’s engine and transmission plants operated straight through the summer without shutdown,” said Freund.
Another factor delaying OTD was related to delivered replacement vehicles sitting on dealer lots without timely notification to drivers.
“Timely delivery processing by dealerships continues to drive additional cycle time into the overall experience for customers,” observed Candice Groth, manager, factory ordering, and vehicle information center for GE Capital Fleet Services.
These were among some of the findings of Automotive Fleet’s 14th annual OTD survey, which was based on data and analyses provided by six fleet management company (FMC) survey partners. The six survey partners were:
- GE Capital Fleet Services.
- LeasePlan USA.
- Wheels Inc.
The AF OTD survey tracked deliveries of 136,747 new vehicles in the 2013 model-year, representing 87 different models.
The survey methodology calculated OTD times for cars from the day an order was placed with a factory to vehicle delivery to a dealer (not driver pickup). Truck OTD was calculated from order placement to delivery to an upfitter or, if no upfitting was required, to a dealer. The days spent at an upfitter were not included in truck OTD times.
The industry average was calculated for each model tracked based on information provided by participating fleet management companies.
MY-2013 OTD vs. MY-2012
The good news is that OTD was relatively unchanged for the 2013 model-year.
“Overall, order-to-delivery times were about the same in 2013 as they were in 2012,” said McHugh of ARI.
This observation was echoed by the other FMC survey participants.
“Although some models experienced increases, there were many models that improved or didn’t change. Some of the OTD delays that did occur, particularly early in the model-year, were due to multiple recalls on a specific model and material/quality holds,” said Cindy Gomez, director of vehicle acquisition services for Donlen. “However, as the model-year progressed, OTD times seemed to improve.”
Two vehicle segments that showed the greatest improvements in OTD times were trucks and SUVs.
“In reviewing the data from MY-2012 to MY-2013, there was significant improvement from order-to-delivery with cargo vans and utility trucks. In some cases, manufacturers improved time spans by as much as 30 days. These tighter time frames created a better ordering experience for our mutual customers, as we are more in line with our original past lead times of 10-12 weeks for these vehicle types,” said Groth of GE Capital Fleet Services.
The faster delivery times for light-duty trucks and SUVs in the 2013 model-year was also cited by PHH Arval.
“Overall, 2013 was another model-year where we realized improvements to order-to-delivery times, particularly to key truck and SUV models,” said Kokos of PHH Arval. “Although there was some variability among the manufacturers and delays throughout the model-year for some models, the motor companies showcased improvements to both production efficiencies and cycle times. This was critical, since demand in these segments continues to show growth.”
Agreeing was LeasePlan USA, which made a similar observation.
“We saw an average improvement in the truck and crossover segments by more than seven days. The van segment remained unchanged year-over-year,” said Elizabeth Kelly, director of operations, vehicle acquisition for LeasePlan USA.