Element Fleet Management Releases Trends Report

As inflationary cost pressures continue to impact many fleets, Element Fleet Management’s newest report highlights the top issues fleets face today.

Trends by Element is a quarterly report that digs into the latest global fleet trends and insights across the U.S., Canada, and Mexico. Each quarter, the FMC prioritizes the three to four most relevant topics that “all fleet leaders should be aware of based on input from client conversations and a thoughtful assessment of the latest macro-economic trends.” The report combines expertise from Element’s Strategic Consulting team, analysis and insights from its fleet database, and external data for macroeconomic indicators such as inflation, third-party used-vehicle auctions, and fuel projections based on data from the U.S. Energy Information Administration, Kent Group, and Bloomberg.

Highlights from the Q2 “Trends by Element” report includes insights on:

Safety: Road fatalities are rising as traffic returns to normal. Establishing a safety culture is critical to ensuring driver safety and mitigating risks. Due to the number of vehicles on the road increasing to pre-pandemic rates, fatal accidents involving car crashes in 2021 exceeded 2019 by 19%, according to the National Safety Council (NSC).

Vehicle acquisition: Supply chain constraints continue, and placing vehicle orders early remains vital to controlling rising fleet costs. The global chip shortage is likely to continue impacting vehicles orders for the remainder of the year and into 2023. In the U.S., there has been an 8.4% increase in the average capital cost for each model year (factory and stock). The good news is that auto production could still improve this year by as much as 30% versus 2021, but it will depend on the market situation in China and the geopolitical tensions in Europe.

Remarketing: Overall auction prices in the U.S. are approximately 30% higher than in 2019. The used market is expected to slow but remain elevated compared to the last five years. The outlook for the second half of 2022 (and into 2023) is for overall market process to decline as higher interest rates and less government support slow down the demand from elevated levels in 2021. 

Fuel: Rising fuel prices continue due to increased demand and geopolitical uncertainties impacting global crude oil. The U.S. Energy Information Administration (EIA) expects the U.S. retail average to be $4.07 in 2022.

For further analysis of the North American market and recommended actions for fleets, view the Q2 Trends by Element report HERE.